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Oversold levels and open orders

On this example we see how below the level 1.3000 practically there is not any accumulation of Open orders. In this case we could say that the market is oversold.

However as in theory the accumulation of open orders does not track the smart money but only the uninformed traders, any break - out below 1.3000 in that time would be a very important signal that smart money was selling. 

However it did not happen in that way and the moarket corrected in the direction of the accumulation of orders. 

This pattern would be very usefull in the detection of oversold, overbought levels.

 

 

Comments

  • Jack1 2801 days ago

    It may be in this theory:  Sellers of euro see there is no buy order there, so, they exit out their short trades. No buyers there, they won't expect further selling, selling momentum will die. 

    So, this may be a running model by market makers,

    1. price often come to the no-order zone, then, stop;

    2. price often penetrate the plenty-orders zone, to trigger orders or kill orders.

  • JohnLast 2800 days ago

    Jack1 thanks for the comments. The whole story if Open orders is very interesting to me, everybody knows about fibonacci retracements and how to draw trendlines but a quite a few are aware of the order flow levels.

    Here we have e delayed information but even if it is delayed it is useful.