Transcription
What is up my people? In today's video, we are going to talk about the secret source called order flow. So, what exactly is order flow? Well, we have structure. Structure is important. Structure is great. Yes, but within structure, we are always going to do one of three things, really. We're either going to continue with the trend, right? We put in a low, we expand. We put in a low, we expand. We're going to pull back. We put in a high, we pull back. We put in a high, we pull back.
Back, sorry. Four things. We're even going to again. Now, well, if I'm here and I'm seeing price and I'm trying to continue with the trend, it's going to do one of four things, right? It's going to pull back, that's one. It's going to expand, that's two. It's going to range, that's three. Or it's going to change character, okay?
Now, what you make money by? Now you have your structure. For example, we have this structure, this low to this high, and we are deciding, okay, now what is price doing within this range? Are we pulling back? Should I be looking for sells? Are we expanding? Should I be looking for buys? Are we going to put in a change of character? Should I no longer be looking for buys and looking for sells? All of this, this, what are we doing within our structure is order flow, okay? It's the secret source. It's telling you what we are doing within structure and arguably, it's more important than structure because if you don't know what we're doing within our structure, you're just going to get smoked.
And I'll break it down a bit for you on the charts. So again, let's start with our structure. So this, we have a break of structure here on the 5 minutes. So that gives us this swing point. So lower time frame structure is higher time frame order flow. That's why it's always good to use a combination of time frames. So this is my higher time frame break of structure. Now, am I looking to enter on this fair value gap? No. Why? Because I only enter my previous swing point, which is this high to this low. Where specifically can I enter on this previous swing point? Let me go down to the lower time frame and check order flow.
You can see if I follow the path from the left to the right, put in a low and then we put in a high, put in a low, then we this high, put in the low, this low indeed put in a new high. We came back, we respected this zone, we pushed through, came back, tapped into here, we pushed through, okay? So let's just focus on this lower time frame structure because this is what we said is higher time frame order flow. Now we can see we're putting in bearish zones. This was the first zone where we indeed switched bullish when we got technically change of character because this low took this high. We came, we respected this zone, we moved up. That is your first sign of bullish order flow. That is your sign of a market reversal.
So now with market reversal, we should expect a trend continuation. Market reversed, we expanded, we came back into this zone, we expanded again. What do we notice about this zone as well? We got a beautiful six taps, one, two, three, four, five, swept liquidity, we expanded up. So now this zone has been mitigated. There's no reason for order flow players to return into here unless we're going to change character. So that's how we can guess change of characters by reading order flow.
Now we have this zone. What do we notice about this zone here? Price hasn't come and mitigated it. We haven't filled in these areas here. So this zone here, okay, this is where I'm going to be looking specifically for my trade. So when we go back to the 5 minute, I've gone from this big point of interest to this refined area here. Now, when price finally does retrace into it, if it doesn't retrace into it, guess what? I don't take a trade. Perfect.
I'm going to go down to the lower time frame and I'm going to read order flow. Order flow, what's my structure like on the lower time frame? Who's in control, buyers or sellers? Right now, I have no indication that buyers are back in control. I can see we're putting this low. Now buyers are trying to step in and take out the sellers that were present here. Let's see if they were successful in doing so. We can see price expanded to the downside, we pulled up, we accumulated lows of sell orders came in here, we dumped. This is order flow. So these sellers here are still in control. They're either going to fill back their orders and continue to push price lower, or we're going to actually break and we know buyers are in control because they broke these sellers, okay? They took them out. Let's see. Okay, sellers still in control.
So now we have a new break of structure between this low and where we broke it. So again, if buyers are going to step in in this my higher time frame demand zone and need continuation, I need confirmation. Sorry. So we'll continue playing price out. Okay, this is my first possible sign of reversal. And the reason I say that is by reading order flow. I can see we put in a low. It's lower than put in this high. This high then did what? This high then put in a new low and then we came and we ran that high. So this low actually took out this high. So these buyers down here took out these sellers up here. Now we're going to retest this zone here. It's exactly the same on every time frame. So we should expect the buyers to hold in here and continue higher. Let's see. Nice, nice. So buyers stepped into here, filled in some orders and continued higher.
Okay, we are possibly seeing now buyers stepping in in a higher time point of interest and order flow switching from bearish to bullish. This we know had a lot of sellers in this area here. We accumulated, we got a big push down. You can see price came, filled in some orders, dumped down. Price came, filled in some orders. So when we see this zone mitigated once, twice, it's less likely that this is going to hold because the orders that pushed price down have already been filled. But let's see if we sweep this and we do decide to fill in more orders in the supply zone. As you can see, is it a surprise that this tapped into here gave us a lower low? No, because there were supplies. But what does this mean now? This also means that if this supply area here, if it fails to bring us a new low and we run that high, what supply tried to step in, tried to give us a new low with this downtrend, it failed to do so and then we take all these supply buyers out. If we run this high, we've now stopped out all these sellers up here. Perfect.
Now I know we have confidence that bullish order flow has started. Bearish order flow has stopped. The first confirmation, this low, this high, this low indeed took out this high. We came down, we touched into here, we continued higher. Signs of bullish order flow. This final supply zone here, price tried to reject. This is amazing confirmation when price tries to reject because then we know their sellers present. It fails and then we take them out. To I know buyers are in control. Now, where can I look for an entry? Well, if I go to the M5. So here on the M5 is where we broke this area of supply. So we want to look at now. We know buyers are in control. They stepped in at this demand zone. We noticed where are the buyers resting? Well, all the flow, they are resting here in this little demand zone here. So it's the same thing. So we can now set our position in here. You can put your stop loss below. Just for this example, we'll do that and we'll just target this high here. Play that out. The demand gets filled and we take out these highs here.
So look how simple that was. Structure, look at order flow, lower time frame structure and order flow, supply demand, take it out. Appreciate you guys watching as always. Any questions, please feel free to drop them in the comments below and I'll see you in the next video.