Order flow is the pattern and volume of buy and sell orders moving through a market in real time. Traders use order flow data to see where buying and selling pressure is concentrated at specific price levels, which gives them a view of near-term supply and demand that is not visible on a standard price chart alone. Order flow analysis is particularly common in futures and equities trading, where the market structure makes depth and transaction data readily available.
Order flow analysis typically involves several data sources. The depth of market (DOM) shows pending buy and sell orders at each price level, revealing where large resting orders may act as support or resistance. Time and sales data records every executed trade with price, size, and whether it hit the bid or ask. Footprint charts display the volume traded at each price inside each bar, letting traders see where aggressive buying or selling occurred. Together, these views give traders a read on how active participants are positioning in real time.
Order flow trading is a popular approach among funded traders in futures, where the data is widely available and the strategies tend to be short-duration enough to work within prop firm risk rules.
