GOCHARTING

ORDER FLOW
TRADING COURSE
Lesson 4
Order Flow Terms
By: Michael Valtos
Orderflows.com
Glossary of order flow terms and their meaning.

There are many words specific to order flow that aren’t seen in
other forms of technical or fundamental analysis. I am going to
explain them upfront so you can understand them so you will have
a glossary to refer to as you go through this course. I don’t want
you to get stuck on something because you don’t understand what
a term means or what I am talking about.
Aggressive Buyers - Traders who buy at the market, buy from the
offer. They cross the bid-offer and buy the offer.
Aggressive Sellers - Traders who sell at the market, sell into the
bid. They cross the bid-offer and sell the bid.
Aligned POCs - Two or more
consecutive bars with Point of Controls
at the same price level.
Ask - The current price traders are willing to sell. Also called the
offer.
Balance - Area where two-sided trade takes place, and the market
is establishing value with trade facilitation taking place. Often
traders are waiting on more information to come into the market.
Bid - The current price traders are willing to pay.
 Blowoff Delta

Blowoff Delta - Abnormally high delta number that occurs at a

high or low. Seen in capitulation or FOMO.
Buying Imbalance - When aggressive buyers outnumber
aggressive sellers in the two-way auction by a predetermined
ratio, usually 4-1 (400%).
Capitulation - When traders just throw in the towel on a position
because they can't take the heat of the trade anymore. Opposite is
FOMO.
Cumulative Delta - The trading session's accumulation of delta.
Indicates to a trader if the session is dominated by net aggressive
buyers or net aggressive sellers.
Delta - The difference between aggressive buyers and aggressive
sellers.
Delta Divergence - When the bar delta and price are opposite.
When a new or equal high is made and the bar has a negative
delta and the bar closes lower than it opened, that would be
considered a bearish delta divergence. When a new or equal low
is made, and the bar has a positive delta and the bar closed
higher than where it opened. That would be considered a bullish
delta divergence.
Delta Footprint - A footprint chart of delta at a price level.
DOM - Depth of Market. A tool that shows the bid volumes and
offer volumes at each price level.
Exhaustion Print - When the
volume on the top offer side
of a red down candle or
bottom bid side of a green up
candle is below a certain
predetermined volume.
Footprint Chart - A chart that plots the volume traded on the bid
and the volume that traded on the offer at each price.
Imbalance - When aggressive trading is dominated by one side
over the other. If aggressive buyers outnumber aggressive sellers
in the two-way auction by 4-1 or vice versa, aggressive sellers
outnumber aggressive buyers in the two-way auction by 4-1.
Market Generated Information - Information that only the order
flow can give a trader such as delta, POC and imbalances.
However, those are just data points, a trader has to know how to
connect the dots from those data points.
Max Delta - The most positive delta was in a bar. The point
aggressive buyers were strongest.
Migrating POC - Occurs when each bar's point of control moves
higher or lower over several consecutive bars. A sign that value is
shifting higher or lower.
Min Delta - The most negative delta was in a bar. The point
aggressive sellers were strongest.
Negative Delta - When there is negative delta, it indicates there
are more aggressive sellers than aggressive buyers in the bar.
More volume was sold into the bid than bought from the ask.
Offer - Another term for the Ask. The price sellers are willing to
sell at in the two-way auction. Also see Ask.
Passive Buyers - Buyers who are working a bid in the two-way
auction. They can be on the current bid or working bids below the
current bid.
Passive Sellers - Sellers who are working an offer in the two-way
auction. They can be on the current offer or working offers above
the current offer.
POC Extreme - When the Point of Control appears on the top price
level of a red down candle or the bottom price level of a green up
candle.
Point of Control - The price level in a bar where the most volume
traded. Sometimes referred to as the COT, Commitment of
Traders. In Volume Profile and Market Profile the Point of Control
is the price level where the most volume traded during the trading
session. In order flow, it is the price level in the individual bar
where the most volume traded on the bid and offer.
Positive Delta - When there is positive delta, it indicates there are
more aggressive buyers than aggressive sellers in the bar. More
volume was bought from the offer than sold into the bid.
Resistance Selling - When there
is a heavier than normal volume
of trades on the offer side of a
red down candle which usually
causes the red down candle to
have a positive delta. A type of
absorption.
Selling Imbalance - When aggressive sellers outnumber
aggressive buyers in the two-way auction by a predetermined
ratio, usually 4-1 (400%).
Stacked Buying Imbalance - When there are three or more buying
imbalances stacked neatly on top of each other in a bar.
Stacked Selling Imbalance - When there are three or more selling
imbalances stacked neatly on top of each other in a bar.
Stopping Volume - When there is
larger than normal volume that
trades at the top offer side of a
red down candle or the bottom
bid side of a green up candle.
Supportive Buying - When there is heavier than
normal volume that traded on the bid side of a green
up candle which usually causes the green up candle
to have negative delta. A sign of absorption.
Sweep - When aggressive traders trade through several levels at
once in the same order.
 Thin Prints - Price levels in a bar where very little or no volume is
traded either on the bid side or offer side.

Sometimes they are the result of a

sweep or stop run, but can also be
caused by momentum. The
market often comes back to retest
thin prints.
Trapped Traders - Traders who are caught offside in the market.
They are long and wrong or short in the hole. Basically, they
bought the high of a move or sold the low of a move.
Two-Way Auction - The bid-offer of the market. The market is bid
at one price and offered at a higher price. The trading that occurs
is done via the two-way auction.
Volume - The number of contracts traded in a bar and the number
of contracts traded for the session.
Now you know the most commonly used terms in order flow as
well as the foundations of order flow. Now you can start to put them
to use in your own analysis.
This concludes Lesson 4.

In Lesson 5, you will learn how to read the market with order flow.
By now you should have a good understanding of the important
aspects of order flow and you will learn how to put it all together
to analyze the market with order flow.