medium · Order Flow Analysis order-book-dom
In ES, price is approaching the overnight low of $4,505.00. A large iceberg bid is detected: 600 contracts trade at the bid price of $4,505.00 while the visible bid quantity never exceeds $50.
How should an order flow trader react?
- Wait for the resting iceberg bid to be fully 'taken out' before entering in the direction of the eventual break.
- Enter short immediately, because 600 contracts of aggressive selling hitting the bid confirms strong bearish control.
- Ignore the level completely, since the small 'displayed' bid quantity is too thin to reflect real institutional size or intent.
- Enter long with a stop below $4,505.00, as an institution is using the overnight low to accumulate a large position.
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