Key Sections
- What Is Real Order Flow and Why Should We Consider It an Edge in Trading?
- XAU/USD Real Order Flow (2024-Nov-19 -> 2024-Dec-27)
- How the Market Shapes the Decisions of Retail Traders
Understanding Real Order Flow: A Trader’s Edge
When we talk about real order flow in the forex market, some traders mistakenly think it refers to trading volume or something similar, but that’s not the case!
This data is gathered from multiple forex brokers and is targeted at retail traders, not large traders with millions of dollars in their accounts!
The purpose of this data is to understand how the market can influence the emotions and decisions of retail traders!
The total number of retail traders participating in our Order Flow Tracker is approximately 100,000.
XAU/USD Real Order Flow (2024-Nov-19 -> 2024-Dec-27)
In a broader perspective, real order flow often forms around round numbers that have emotional significance. For example, in XAU/USD, it tends to appear around every $100 or $50 level.
How the Market Shapes the Decisions of Retail Traders
As you can see in the picture, the market always tries to position retail traders on the wrong side!
The market fakes rejections and pullbacks, breaks out above, and then drops back below the zone again. It convinces retail traders that the market is in a sell-off, triggers a bullish breakout to make them think it’s bullish, and then—boom! It hits with another wave of bearish momentum.
In short: The market is alive, and it generates profits for the 1% of retail traders who can recognize these fake moves and stick to their plans without letting emotions take over. As I mentioned earlier in Lost Truth in Trading: Gambling Is Similar to Trading, trading is not an easy job!
Risk Warning : Be cautious with the money you risk in financial markets. Until you become a true professional in this industry—which can take 5 to 10 years—your trades will involve significant risk with a 50-50 chance of success. (Remember Even Pro Traders Lose Money)
