1. What is OFT

Order Flow Trading

What is this strategy?

This strategy is part trend trading. Part of the process is identifying what is the trend. Some orders *can* be counter trend but that is totally up to you if you want to take it.

This is a re-tracement trade. We will not chase for the price. we will wait for price to move then wait for the re-tracement. We enter during the re-tracement. Since prices do not move in one line (like lasers do), re-tracement provides us lower risk during entry.

Order Flow Trading identifies price zones where imbalance occurs. We call them Supply and Demand zones. Supply zones are zone where more sell orders are present than buy orders. This means that price will likely fall after hitting this zone as there are less - to no buy orders sitting on that zone. Demand zones are zone where more buy orders are present than sell orders. This means that price will likely shoot up after hitting this zone as there are less- to no sell orders sitting on that zone.

Price imbalance normally occurs when large institution places a large order in the market. Imagine a Multi-National Company based in Germany needs to pay its employee's salary in US tomorrow. This MNC will EUR and buy USD today. Once they place their large order, a price zone where more buy EUR and sell USD will occur. This MNC just created a Demand zone with it's large order.

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