How To Trade Order Flow & Context?

By Dean | Market Profile

Mar 10

Context is king in trading, especially when using Order Flow Charts. Order Flow charts show whether buyers are sellers are aggressive at a particular level. But that information alone is not sufficient to make a prudent trading decision. So the key is to use order flow & context together.

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Why is context so important while using Order Flow?

There are many patterns on Order Flow Charts that show us the waxing and waning strengths of buyers and sellers. Most relevant of them all are delta divergences, trapped buyers and sellers, stop hunts, passive (limit) buying and selling), etc.

But the problem with Order Flow charts is that the indications of these patterns are present at multiple places in a given trading day, and not all the places are relevant and generate the desired follow through. So you have to use order flow & context together.

Lets look at some examples,

Order Flow & Context

Market Profile

Order Flow & Context

Order Flow






Example of Order Flow & Context

The example above shows following points,

  • Breach of important support brought in BD sellers.
  • But Order Flow Charts showed lack of interest as well as signs of accumulation.
  • Where amateurs were selling the BD, Smart Money had already accumulated their longs.

A word of caution though, Order Flow Charts show similar patterns at various places in a day. It is important to see whether prices are near important reference points so that you can try to gauge what smart money is doing at those levels.

Our goal is to match the smart money or at least avoid being on the wrong side of smart money.

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About the Author

Dean is a full-time trader and mentor, with experience of over 12 years. He trades using Market Profile and Order Flow Charts. Dean absolutely loves to trade. He says “matching my wits against other traders is the most exciting game ever and I get paid to play”. He also likes sharing his learnings and mentoring committed traders.

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