The term is a little masked. All that’s ever going on in the market are transactions: the buyer buys from the seller, the seller sells to the buyer, this is the price, and this is the number of contracts. Then there is another trade; etc. Those are the orders. It is called a “flow” since what you are trying to watch for is the execution of all these trades, the potential direction that they may influence the price; and where can you find a seller to buy from now and a buyer to sell to overhead later: who is there trading, and who is there offering. It is called a flow since your trade falls into a sequence of events that eventually works out into a price action direction, where you spread your trade, facilitate trade with other traders, and hopefully take a profit for doing that. So you are simply watching the traders trade to understand the auction and your opportunities.
www.rpsvinod.com
