Docs / Guide
What order flow is
Order flow is the stream of orders reaching an exchange: limit orders that wait in the book and market orders that take from it. Price moves when market orders use up the limit orders in their way. This guide is the idea behind footprint charts, delta and the order book, plus the four setups traders most often use it for.
Updated
Two kinds of order
Every order sent to an exchange is one of two kinds, and everything else in this guide builds on the difference.
A limit order names a price and waits. “Sell one coin at 60,100” sits in the book until somebody takes it, or until its owner cancels it. The trader who sends it is called the maker: the order sets a price other people can trade at.
A market order names no price. It trades straight away, at the best price already waiting in the book. The trader who sends it is the taker: the order takes a price someone else offered.
Every trade is one market order filled against one or more limit orders. There is no other way for a trade to happen.
Two kinds of data, and nothing else
Order flow is built on two streams of data from the exchange, and each of them shows one of those two kinds of order.
The first is trades: every deal that was done, with its price, its size, and one extra piece of information — which side sent the market order. The exchange knows this and says so.
The second is the order book: the limit orders that are still waiting. They have a price and a size, but they have not traded yet, and they can be cancelled at any second.
Everything on this site is made from those two streams. Bars, delta, profiles and heatmaps are just different ways of arranging them. There is no third, secret source.
Every trade has two sides
This is the part that confuses most beginners, so it is worth one slow sentence.
Every trade is a buy and a sell at the same time. Somebody bought, somebody sold, and the volume is the same number for both. So “more buying than selling” can never be true if you count it that way.
What can be true is this: one of the two sides sent a market order. It did not wait for a better price; it took the price that was already offered. That side is in a hurry, and order flow calls it the aggressor. The other side had a limit order waiting in the book.
When this guide says “buying”, it always means market buying — buy market orders filling against limit orders to sell. That is the number the exchange lets us count, and it is what delta measures.
A market where every price is on a sign
Picture a market street where nobody haggles. Every stall has a sign with its price and a pile of goods behind it. Next to them stand buyers holding notes: “I will take two kilos at this price, whenever somebody agrees.” Nobody is doing anything yet. Both groups are waiting. The signs and the notes are limit orders, and together they are the order book.
Then someone walks in who needs tomatoes now. They do not write a note. They go to the cheapest stall and buy at the price on the sign. If they want more than that stall has, they empty it and walk on to the next cheapest one, which is a little more expensive. That is a market order to buy — and walking on to the next stall is what a rise in price is.
Nobody met anybody halfway. The limit order named the price, and the market order accepted it. The picture also shows why the book and the trades are two different streams: a sign can be taken down before anyone comes, and only a sale actually happened. A real market differs in scale, not in kind — thousands of stalls at every price, and signs that appear and vanish in milliseconds.
Price moves when someone runs out of patience
Now put the two streams together.
At any moment there are limit orders waiting just above the price (the ask) and just below it (the bid). A buyer who wants coins right now sends a market order, and it fills against what is waiting above. If it takes all of it, the price at that level is gone, and the next trade happens one level higher. That is what a rise looks like from the inside: market buy orders eating the limit orders to sell.
So price does not move because there is “more buying”. It moves because market orders on one side ate the limit orders on the other, and there were not enough limit orders there to stop them.
This gives you one simple question to ask at any price on the chart: who was in a hurry, and did it work?
The three answers you will see
There are only three useful answers to that question, and every order flow pattern is a version of one of them.
Continuation. Market orders arrive, the limit orders in their way are eaten, and price moves. Normal, and the most common.
Absorption. Market orders keep arriving, but price does not move. Somebody is quietly filling all of them with limit orders and is not stepping back. A lot of effort, no result. This is the pattern that shows a level someone is defending.
Exhaustion. Market orders on one side get smaller and smaller, and price stops going further. Nobody is defending anything; the side that was pushing has simply run out of people. Little effort, no result.
You do not need a special indicator to see them. You need to compare two things: how much effort went in (market-order volume) and what happened to price. A footprint chart puts both on the screen at the same time, which is why it is the first thing to learn here.
Effort against result, with one case that is worth recognising on its own:
- Large effort, price moves the way it was pushed: continuation. The limit orders in the way were eaten and price moved on.
- Large effort, price hardly moves: absorption. Someone with limit orders is taking all of it.
- Shrinking effort, price stops making progress: exhaustion. The side that was pushing is running out.
- Small effort, price moves a long way: continuation through empty levels. Almost no limit orders were waiting, so a little pressure went far. The move is real, but nobody has tested it yet.
“Large” and “small” mean something only against the bars just before, on the same instrument and timeframe — there is no number that is large everywhere. And each reading is what usually lies behind the picture, not what happens next.
Where price finds value
There is one more idea worth knowing, because it explains the profiles.
Think of the market as an auction that never closes. Price moves up to look for sellers and down to look for buyers. When it goes too far, it finds nobody and comes back quickly — few trades happen there. When it reaches a price both sides are happy with, trading slows down and volume piles up.
So the amount of volume at a price tells you something the candle cannot: this is where the two sides agreed. Those areas often matter again later, which is what a Volume Profile is for. Traders call the busy area acceptance and the quick visit rejection.
What it is good for
Knowing who was in a hurry is only worth the effort if it changes what you do. It helps in four places, and none of them needs a forecast.
Telling a real move from a weak one. On a candle, a breakout with heavy market orders behind it looks the same as one nobody followed. On a footprint the difference is plain.
Seeing where a level is being defended. Absorption shows a price where limit orders keep filling everything that hits them. Traders place their risk against a level like that: the idea holds while the level holds, and is wrong as soon as it gives way.
Noticing when a move is running out. Exhaustion shows the pushing side getting smaller. That is a reason not to chase a late move, or to stop expecting much more from one you are already in.
Finding out early that you are wrong. What you acted on can disappear: the defended level breaks, or the market orders stop coming. If you see that early, you can get out while the loss is still small.
That is the edge order flow gives you. It does not tell you the future, but it helps you act where the evidence is and cut mistakes sooner.
Four common setups
These are the setups traders most often use order flow for. Each has three parts: a price that already matters, the order flow to look for there, and the thing that would prove the idea wrong.
A breakout with buying behind it. Price leaves a range or crosses a level many people watch. You want heavy market orders in the direction of the move, imbalances stacked through the new prices, and delta that agrees with the bar. The idea is wrong if the market orders dry up straight away and price slides back into the range.
A false breakout. Price pokes through the same kind of level, but the market orders behind it are small, or on the wrong side, or large but getting nowhere. Traders treat the move back into the range as a trap for those who bought or sold late. The idea is wrong if price holds outside the range and the market orders come back.
Absorption at a level. Market orders keep hitting a level, often an earlier high or low or a busy area of a Volume Profile, and price stops moving there. The limit orders are winning. Traders side with whoever is defending the level and keep their risk just beyond it. The idea is wrong as soon as the level breaks.
Exhaustion at the end of a move. Each new high (or low) comes with fewer market orders than the last, and cumulative delta stops following price. The move has not turned yet, but nobody is paying for it any more. The idea is wrong if large market orders start arriving again in the direction of the move.
In all four, the level comes first and order flow second. Find the prices that matter, such as a range edge, an earlier high or low or a point of control, with the levels, profiles or technical analysis you already use. Then watch the order flow when price gets there. In the middle of nowhere, none of these setups means much.
The worked example at 82,000 follows two of these setups on real data, at one price on one day.
What order flow cannot tell you
An honest list, because most of the trouble beginners have with order flow comes from expecting more than it can give.
It does not show intention. You see that someone bought in a hurry. You never see why, or what they will do next.
It does not show orders that are hidden. Some size never appears in the book. What you see is what the exchange publishes.
Limit orders are not promises. A large wall can be cancelled a second before price reaches it. Sometimes that is the whole point of putting it there — see spoofing.
One mark is evidence, not a signal. One imbalance, one bubble or one wall means almost nothing on its own. The setups above rely on several things agreeing at a price that already matters for another reason.
It guarantees nothing. A breakout with buying behind it can still fail, and a defended level can still break. Reading order flow well improves your odds on where you act and how early you spot a mistake. It does not remove the risk.
It cannot be learned in an afternoon. Early on it is easy to see more patterns in a footprint than are really there. Scroll back through history, read a place on the chart, then look at what followed — many times, before any of it goes near a real decision.
It is not advice. This site is an analysis tool. The setups above describe how traders commonly use order flow, not a recommendation to buy or sell, and the decision is always yours.
Where to go next
Read how to read a footprint chart next: it is the same three answers above, made visible bar by bar. After that, delta gives you the numbers, and the live order book shows what is waiting. Stacked imbalances and unfinished auctions keep what a bar left behind on the chart after it closes. If a word here was new, it is in the glossary.
The same ideas apply to any exchange-traded market: crypto, futures or stocks. The terminal itself shows crypto spot markets and perpetual futures contracts.