This thread is going to be my journal of achieving success through order-flow trading. Order-flow has always been somewhat cryptic to me, mainly due to the fact that most public domain forums have a tendency to stray away from this concept when mentioned in a discussion. There was a thread started over at FF that gave me the kick-in-the-butt that I needed to start my research on this subject. The OP talked about a 'one-way' market caused by inefficiencies in an efficient market, and posted pictures of his recent 'one-way' trades. This, of course, was very intriguing to me and I have not stopped researching market mechanics and structure since then. Trading and Exchanges was one of the better materials that I have came across for retrieving this sort of information. I will define a few definitions as how I interpret classes of market structure, and the stages that Smart-Money goes through. If anyone has any comments, criticism, or contributions, please feel free to bring it to the table :).
Definitions:
Liquidity - The immediacy to trade.
Limit Orders - Limit orders offer liquidity.
Market Orders - Market orders demand liquidity.
Stops - I view these as market orders. They want out at a specific price NOW.
Accumulation - A phase that smart money goes through in order to accumulate shares of a commodity that they view as undervalued. They tend to not show their hand at first, as that would cause higher prices by the herd.
Distribution - A phase that smart money goes through in order to distribute shares of a commodity that they view as overvalued. They tend to not show their hand at first, as that would cause lower prices by the herd.
Volume - The amount of shares traded at a specific price at a point in time.
Time - Time allows one to see the imbalance of order-flow at a specific price. The longer price is able to stay at a level, the more in-balance the orders are. Thus, the shorter price can stay at a level, the more out of balance they are.
Price - The value of a commodity at a specific point in time. Price is constantly changing.
(If you have any definitions to add, please feel free to do so.)
Price Action - The by-product of orderflow. Analyzing is done through subjective interpretation.
I will post more pictures later tonight on how I look for orderflow using the GomVolumeLadder.
For those interested, here are the 'one-way' pictures that got me started on this journey: