Many experts share Bilotta’s AI agent outlook, including Charles Hoskinson, founder and CEO of Cardano’s Input Output, who said that by 2035 they will become more relevant than humans.

The macro numbers support his stance. Data from the U.S. International Trade Administration via Trade.gov shows that business-to-business (B2B) e-commerce across the broader Asia-Pacific region is expanding at a 15% annual clip, with market values projected to climb past $28.9 trillion by the end of this year.

Yet, despite that explosive growth, the plumbing underneath remains broken. The problem is fundamentally an issue of legacy infrastructure and compliance, Bilotta noted.

Global financial regulations, banking protocols and identity verification checks were built strictly for humans. An autonomous AI software agent cannot pass a standard compliance check, he said or execute a payment loop unless a human manually intervenes to clear the transaction.

To bridge this structural gap, the industry requires a compliant backend middleware that acts as a universal interpreter. Bilotta explained that by dropping an Anthropic-standard Model Context Protocol (MCP) server directly into the payment infrastructure, software agents can programmatically navigate compliance, pull real-time FX quotes, and settle transactions natively across borders without human steps.

While institutional gatekeepers like Stripe and Mastercard have spent billions acquiring fiat-to-crypto APIs to secure traditional corporate treasuries, the automated machine-to-machine economy across emerging corridors remains heavily underserved.

Bitcoin BTC$64,937.87 is facing selling pressure ahead of today’s Federal Open Market Committee (FOMC) interest-rate decision at the first meeting under new Fed Chair Kevin Warsh.

The largest cryptocurrency pulled back below $65,000 after trading near $67,000 just a day earlier, CoinDesk data show. The broader market CoinDesk 20 Index (CD200) has lost 1.2% since midnight UTC, with all but four tokens declining.

“The main focus for the week is the FOMC meeting under new leadership, with market expectations of interest rate hikes already priced in through 2027,” Laser Digital said in its weekly note.

The market is pricing in no change in the fed funds rate at this meeting. Instead, the focus will be on Warsh’s post-meeting press conference for signals on his views on inflation. Warsh has criticized the Fed’s frequent press conferences and detailed forecasting and may face questions on his stance.

Among stand-out gainers, Uniswap’s UNI token surged another 20% over 24 hours, buoyed by Standard Chartered’s bullish forecast of $100 by 2030. Meanwhile, NEAR, INJ and several stablecoin-related assets dropped as much as 8%.

Derivatives positioning

• The market remains calm ahead of the Fed decision. Activity has slowed, with crypto futures volume falling 20% in 24 hours to $165 billion and open interest dropping 2.3% to $110 billion. Liquidations fell to roughly $310 million, down 44%.
• The calm is also evident in BVIV, bitcoin’s 30-day implied volatility index, which was hovering near an annualized 39% at the time of writing — a level not seen since June 2, just before it spiked to nearly 59% a few days later. Ether’s volatility index is showing similar stability.
• Cardano’s ADA stands out among altcoins. Open interest has climbed to 2.26 billion tokens, nearing the record 2.32 billion set on June 6 and recovering from the June 13 low of 2 billion.
• The rebound points to renewed capital deployment in leveraged ADA markets, though the move isn’t necessarily bullish. The token’s price has slipped from over 18 cents to under 17 cents in two days alongside a negative 24-hour cumulative volume delta. The combination leans bearish, pointing to aggressive trading at market orders rather than passive limit orders.
• ZEC and SUI are the other notable open interest gainers over the past 24 hours, while NEAR and BCH led the losers.
• NEAR has dropped over 9%, and the decline in open interest suggests traders are unwinding leverage during the selloff rather than piling into fresh shorts.
• Most major tokens, with the exception of TRX and CC, are showing negative 24-hour CVD, pointing to broad bearish dominance in trade flows.
• In options markets, BTC puts continue to dominate 24-hour volume rankings, though the $80,000 call expiring March 26 next year also saw notable activity. In ether’s case, calls are leading volume rankings.

Token talk

• UNI has risen for a seventh straight day, its longest winning streak since August 2023, when it ran eight. The token trades near $2.75, erasing its June losses after jumping by more than 10% earlier in the week.
• The accelerant was a Standard Chartered note. The bank’s digital assets head, Geoff Kendrick, initiated coverage on June 15 with a $100 price target for 2030, roughly 40 times the current level, arguing that tokenized real-world assets, meaning stocks and bonds issued onchain, will flood into DeFi and Uniswap will capture the flow as core market infrastructure. He predicts a path through $6.50 by year-end.
• Two fundamentals sit underneath the call. Uniswap’s fee switch, live since late 2025, routes a share of trading fees into buying back and burning UNI, and has removed about 106 million tokens, more than 10% of supply, turning a pure governance token into a deflationary one.
• Separately, tokenized stocks that launched on the protocol earlier this month have already seen more than $9.1 billion swapped through its real-world-asset pools.

The entire bitcoin market is worth about $1.2 trillion as of Wednesday. SpaceX, at $2.5 trillion, is worth nearly twice that, and it is drawing from the same risk budget that flows to crypto – the point ARK made earlier this week when it funded its SpaceX buying by selling other holdings.

The caution is that expectations now leave little room for error, with some analysts warning that a SpaceX stumble would hit the broader market and the AI winners with it.

“With the expectations already sky high, there is little room for error,” Lukman Otunuga, head of markets at FXTM, told CoinDesk in an email. “Should SpaceX disappoint down the line, the fallout will hit the broader stock market, as well as the beneficiaries of the AI boom.”

The numbers support that worry. SpaceX posted a $4.94 billion net loss in 2025 on $18.67 billion of revenue, and at $2.5 trillion, it trades at more than 130 times sales, a multiple some call meme-stock territory.

As such, SpaceX announced Tuesday that it has formally agreed to take over Cursor in a deal that values the AI coding startup at $60 billion. Cursor investors will have the right to receive SpaceX stock based on the implied equity value of Cursor, according to a company filing.

Key Takeaways

• Over 100 Chinese technology companies, including DeepSeek and CXMT, have avoided U.S. trade restrictions despite receiving security clearance for blacklisting.
• An interagency committee greenlit these companies for Entity List designation, but the Commerce Department hasn’t published the updates.
• The Entity List has seen no new additions since October—marking an unprecedented pause spanning more than ten years of enforcement history.
• Security officials identified DeepSeek as aiding Chinese military objectives and attempting to illegally obtain advanced American semiconductors.
• National security analysts caution that this administrative freeze could enable critical U.S. technology to fall into hostile hands.

The current administration has postponed the blacklisting of more than 100 Chinese corporations through the U.S. Commerce Department’s Entity List, Reuters has revealed. Among the companies awaiting designation are artificial intelligence developer DeepSeek and semiconductor manufacturer ChangXin Memory Technologies, both of which received interagency approval for restrictions but remain unlisted.

Inclusion on the Entity List triggers severe export limitations. American companies are prohibited from transferring products, software applications, or proprietary technology to designated entities without obtaining special government authorization, which authorities routinely reject.

This postponement appears connected to diplomatic strategies aimed at preventing escalation with China. Reports indicate that Jeffrey Kessler, the under secretary of commerce overseeing industry and security matters, has worked to suspend Chinese entity designations since the closing months of 2025.

DeepSeek captured international attention in January 2025 after launching an affordable AI system that sent shockwaves through the tech industry. According to a high-ranking State Department representative, the company has provided assistance to Chinese military and intelligence agencies while orchestrating efforts to procure cutting-edge American processors through intermediary corporations in Southeast Asia.

Anthropic disclosed earlier this year that it uncovered coordinated efforts by DeepSeek alongside two additional Chinese AI developers attempting to extract proprietary capabilities from its Claude AI system. OpenAI similarly alerted congressional members that DeepSeek was conducting operations against its technology platforms.

ChangXin Memory Technologies, representing China’s leading memory chip producer, received designation as a Chinese military-linked corporation by Pentagon officials during the previous Biden administration.

Record-Breaking Pause in Enforcement Actions

No fresh Entity List designations have appeared since October. According to Philip Luck from the Center for Strategic and International Studies, this represents an unprecedented enforcement gap exceeding anything witnessed in the past decade.

“The Entity List functions like whack-a-mole and you need to maintain constant vigilance,” Luck explained.

Kevin Kurland, previously with the Commerce Department, characterized the suspension as evidence that commercial considerations are eclipsing national security imperatives. “The absence of any Entity List additions since October clearly demonstrates that trade policy considerations are taking precedence over a vital national security instrument,” he stated.

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No fewer than 75 Chinese organizations operating in semiconductor manufacturing, chip production equipment, and artificial intelligence development received approval for listing but await official publication.

Additional flagged entities include suppliers of components discovered in Russian unmanned aerial vehicles recovered in Poland last September, plus companies accused of distributing restricted Nvidia processors to Chinese educational institutions.

Commerce Bureau Remains Tight-Lipped on Publication Delays

The Bureau of Industry and Security has not provided substantive responses regarding the publication freeze, declining to address questions about DeepSeek and CXMT specifically.

The agency stated it employs “numerous policy and enforcement mechanisms, including the Entity List, throughout regular operations.”

Additionally, the bureau has failed to issue a successor regulation to the AI chip export controls established under President Biden, creating a potential regulatory void that may have permitted advanced processors to reach Chinese entities operating beyond China’s borders.

The world’s third-largest economy is reclassifying crypto as a financial instrument and charting a path to slash punishing tax rates. The change reaches far beyond Japan, and most of the coverage is getting the details wrong.

On June 11, 2026, the lower house of Japan’s parliament passed a bill that begins one of the most consequential regulatory shifts in the country’s crypto history. The legislation reclassifies cryptocurrency from its current home under the Payment Services Act into the Financial Instruments and Exchange Act, the statute that governs stocks and bonds, and it sits alongside a closely linked tax proposal that would cut the tax on crypto gains from a punishing rate near 55% toward a flat 20%.

For more than 135 years, the Kanoo family, one of Bahrain’s wealthiest families, has helped build the Gulf’s entire commercial infrastructure.

The family, with a net worth of up to $6 billion, owns businesses spanning shipping, logistics, travel and finance.

Abdulla Kanoo, one of the heirs to this 135-year-old dynasty, is now involved in crypto. While he refuses to reveal his family’s or his personal bitcoin investments, he says he’s invested in digital assets since 2015 and remains “faithful” to bitcoin BTC$64,740.89.

Kanoo also believes the next generation of global commerce will not be built on ports or banks, but on digital rails or, more specifically, on the blockchain, where programmable money is king.

Kanoo is the co-founder of ARP Digital, a digital asset infrastructure project focused on allowing the movement of money between emerging economies faster, cheaper and with fewer intermediaries.

“The Gulf was where global capital was stored,” he told CoinDesk. “The next chapter is about movement.”

Kanoo is not launching another crypto exchange nor is he pitching a new token. He has his goals set on expanding the family legacy on a global scale.

Most people holding Strategy’s 11.5% dividend-paying STRC, are making a strange bargain with the company; that on monthly snapshot days, the stock will trade near the company’s intended $100 share price.

In between those dates, however, STRC invariably wanders downhill. Indeed, it closed yesterday at $91.79, 8.2% below its target.

Strategy persuades buyers to take the bargain of downside possibility on their investment with an above-market yield of 11.5%.

Strategy, the bitcoin (BTC) treasury company built by Michael Saylor, markets STRC as a near-$100 instrument that strips away BTC’s volatility, providing ostensibly predictable payouts and a USD-stable target.

Anyone who holds STRC at the close of Nasdaq’s regular trading session on the dividend record “snapshot” date receives that payout. 

Because Strategy pays a dividend on the full $100 par regardless of its price on Nasdaq, the company designed STRC to hold near $100 on its snapshot dates.

The actual chart of Nasdaq trades, unfortunately, says otherwise.

STRC had its IPO in July 2025 and didn’t even trade up to $100 until October. For over a trailing month as of publication time, STRC hasn’t traded at or above $100.

STRC crashes ex-dividend

The morning after its snapshot date, the stock trades “ex-dividend,” and holders earn nothing extra for maintaining their investment until another two weeks transpire and another snapshot occurs.

Predictably, the stock always rallies into these snapshot dates and immediately sells off afterward. 

Historical prices bear this out across the security’s short life.

In August 2025, STRC dropped to $92.20 in-between its dividend snapshot dates. 

In September, it drifted to $96.61. October was a similar $96.75. Then November frightened investors with a 9.5% drop from $100 to $90.52.

Although each month’s trading range is unique, this month is risking becoming on of its worst. Just yesterday, shares closed at $91.79.

Run-ups into the dividend snapshots are routine, but declines are just as routine.

China’s central bank leadership has called for tighter attention to stablecoins as privately issued tokens increasingly intersect with cross-border payments and aspects of the international monetary system. In remarks reported by The Paper, Wang Xin, director general of the Research Bureau at the People’s Bank of China (PBOC), urged regulators to monitor stablecoin-driven developments while strengthening international coordination and regulatory cooperation.

The comments also pointed to broader risks regulators associate with payments infrastructure—namely growing uncertainty and the possibility that payment channels could be used in ways that disrupt cross-border transactions. While Wang did not announce new rules or endorse stablecoins, the message aligns with a more restrictive regulatory posture toward private digital money and highlights how compliance requirements could expand for firms operating across jurisdictions.

Key takeaways

• China’s PBOC leadership urged authorities to closely monitor stablecoins’ impact on cross-border payments and the international monetary system.
• Wang Xin warned about uncertainty and potential “weaponization” of payments that could disrupt normal cross-border activity.
• The remarks come after China and multiple agencies previously banned unauthorized renminbi-pegged stablecoins and tokenized real-world assets (RWA) without government approval.
• Wang also flagged central bank digital currencies (CBDCs), saying cross-border CBDC roles warrant similar scrutiny and improved policy coordination.

Stablecoins under PBOC scrutiny: focus on cross-border payment architecture

According to The Paper, Wang Xin said regulators should pay attention to whether stablecoins could assume a larger role in cross-border payments and consider how regulation and international coordination should proceed. The framing is notable because it treats stablecoins not only as a market asset class, but also as potential payment rails that can influence cross-border settlement behavior and, indirectly, monetary and financial stability concerns.

For institutional compliance and risk teams, this matters because cross-border payment use-cases can change a token’s regulatory treatment. Firms that interact with stablecoins—whether as counterparties, liquidity providers, or gateways—may face increased scrutiny around licensing, sanctions controls, and anti-money laundering (AML) and know-your-customer (KYC) obligations depending on the jurisdiction and the nature of the settlement flows.

Wang’s remarks also referenced risks linked to the governance and security of payment systems. In particular, he cautioned that uncertainty and potential weaponization of payments could interfere with ordinary cross-border transactions. While the statement did not specify mechanisms or actors, it reinforces the policy view that stablecoin-based payment networks could be exposed to geopolitical and operational disruptions.

Regulatory context: China’s earlier ban on unauthorized RMB-pegged stablecoins

Wang’s call for closer monitoring follows enforcement actions and rulemaking that have already restricted stablecoin issuance connected to the renminbi. Months earlier, the PBOC and seven other Chinese agencies banned unauthorized issuance of renminbi-pegged stablecoins and tokenized real-world assets on Feb. 6, according to reporting referenced in the underlying coverage.

As described in the broader record of that regulatory action, the rules were not limited to a single geography: they applied to both foreign and domestic entities and covered onshore and offshore versions of yuan-pegged tokens. The framework required issuers to obtain government approval, reflecting China’s preference for state-controlled digital money rather than privately issued digital currencies.

From a compliance perspective, the enforcement logic is significant. When regulators move from general warnings to binding restrictions tied to authorization, firms must assess where their activities sit in relation to “issuance,” “promotion,” “distribution,” and “use.” In cross-border operations, where marketing and technical access can be fragmented across countries, even indirect participation may raise questions about whether a firm is facilitating prohibited activity.

Broader implications for CBDCs and international coordination

Alongside stablecoins, Wang reportedly said central bank digital currencies (CBDCs) should also be observed more closely in relation to cross-border payments, with improved policy cooperation. This suggests China’s regulatory attention is not limited to private stablecoin markets; it also extends to how state digital currencies could influence international settlement.

The distinction is important for institutions evaluating future settlement models. If regulators view CBDCs as a more controllable alternative to private tokens for cross-border payment flows, then international coordination discussions could eventually translate into standards for interoperability, governance, or compliance expectations. Until those standards are defined, firms face uncertainty over how cross-border “digital money” will be regulated across legal regimes.

Additionally, China’s emphasis on international coordination underscores the inherently cross-border nature of stablecoin risk. Tokens can be transferred globally, but regulatory responsibility remains jurisdictional. This mismatch is a key reason why policy makers across regions increasingly tie stablecoin oversight to existing frameworks—such as AML/KYC expectations, licensing for payment or financial services, and controls aligned with sanctions and illicit finance prevention.

Stablecoin growth and compliance pressure from expanding usage

The PBOC’s renewed attention arrives as stablecoins continue to expand in market activity. The coverage referenced data points indicating that stablecoin supply increased and that stablecoins represented a substantial portion of overall crypto trading volume during the first quarter of 2026. It also noted that transaction volume can be heavily influenced by automated activity, with bots generating a large share of volume in that period.

While market statistics do not determine the legality of a token, they often influence supervisory priorities. Higher usage can increase the probability that compliance failures—such as inadequate customer screening, weak transfer controls, or unclear source-of-funds checks—are noticed by regulators and addressed through enforcement or additional requirements.

Institutional actors should also consider how major regulatory approaches are evolving elsewhere. In the European Union, for example, the Markets in Crypto-Assets (MiCA) framework provides a structured pathway for stablecoin-related obligations, including rules designed to mitigate risks from reserve management, disclosures, and operating conditions. Differences between regimes can create friction for cross-border service providers, particularly those offering custody, exchange, remittance, or settlement tooling connected to stablecoin flows.

Against this backdrop, China’s stance—requiring approval for renminbi-pegged stablecoins and tokenized RWA issuance—illustrates one end of the policy spectrum: a preference for tighter state oversight over private issuance. Even where stablecoins are used in ways not directly tied to issuance, the regulatory focus on cross-border payments signals that regulators may still scrutinize service layers around distribution and transfer.

Closing perspective: what to watch next

Wang Xin’s remarks do not announce immediate policy changes, but they reinforce an enforcement trajectory in which stablecoins and CBDCs are treated as strategic issues for payments governance and international coordination. For regulated firms, the near-term priority is to monitor how Chinese guidance develops and how cross-border compliance expectations evolve alongside international policy frameworks—especially regarding AML/KYC controls, authorization boundaries, and controls that address payment-system geopolitical and operational risks.

Order flow trading is the analysis of real-time buying and selling activity to understand how market participants interact and where prices may move next. It focuses on executed orders, resting orders, liquidity, volume, and market participation. This shows the activity behind price moves, not just the moves themselves. Its purpose is to help traders identify potential trades, assess market sentiment, and make trading decisions.

Traders apply order flow analysis across forex and CFD markets. This article explains how order flow works, its components, and three order flow trading strategies.

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What Is Order Flow Trading?

Order flow trading is a method that uses the analysis of executed trades, pending orders, liquidity, and volume to understand market participation and anticipate potential price movements. Applying order flow in trading involves examining where buy and sell orders might rest in the market.

To implement order flow analysis, traders focus on three components: liquidity, supply and demand zones, and trade execution.

Liquidity is the pool of resting orders waiting to trade at each level. These orders form supply and demand zones, where buying or selling has concentrated. Trade execution occurs when incoming orders meet that liquidity, and the balance between the two drives price discovery.

Much of the trading volume comes from banks and funds, so reading institutional trading activity adds context that price alone cannot give.

Order Flow vs Volume Analysis vs Price Action

Order flow, volume and price action describe market activity at different depths.

Price action reflects the shape of past price on a chart. Volume shows how much traded. Order flow shows the orders behind that trade. Order flow gives the most detail of the three.

Price action shows what happened. Volume tells you the size of activity but not its direction or intent. Order flow adds that missing layer. It shows whether buyers or sellers were the aggressors and where liquidity zones build up.

	Price action	Volume analysis	Order flow Advertisement
Measures	Price movement over time	Quantity traded	Orders behind each trade Advertisement
Shows	What price did	How active the move was	Who was aggressive, where liquidity sits Advertisement
Common tools	Candlesticks and chart patterns	Volume bars, volume profile	Footprint charts, DOM, cumulative delta Advertisement
Limitation	No trade size	No direction or intent	Complex Advertisement

Tools such as volume profile, Volume-Weighted Average Price, Volume-Weighted Moving Average sit between volume and order flow analysis, mapping volume across price to hint at order concentration. The practical trade-off is depth of insight against complexity. Order book analysis is the most detailed but also the hardest to read.

Core Components of Order Flow Analysis

In the realm of trading, dissecting the order flow is akin to peering into the heart of the market, revealing the intentions of traders through the movement of buy and sell orders.

The sections below cover the main chart components in order: order blocks, market structure and trends, imbalances, and volume. The commonly used order flow tools then follow, namely footprint charts, depth of market (DOM), also called market depth, and cumulative delta, alongside the volume profile.

Understanding these components allows traders to interpret order flow directly from the chart, providing insights into where the market might head next based on past and present trader actions.

Order Blocks (Supply and Demand Zones)

In analysing order flow on a chart, order blocks, or supply and demand zones, appear as areas where price action has shown significant movement away from a particular level, indicating a concentration of buy (demand) or sell (supply) orders.

These zones are typically highlighted by a sudden surge or drop in price, leaving behind a footprint where future price often reacts. For example, a demand zone might be identified by a rapid price increase from a specific area, suggesting buyers overpowered sellers significantly.

An order block marks where unfilled orders cluster, forming dense liquidity zones before a sharp move. When price revisits these supply and demand zones, those resting orders can absorb or repel it, which is why the area often produces a reaction. Blocks left by institutional trading activity tend to be the clearest.

Market Structure/Trends

The market structure, or trend, is visible through the series of highs and lows on a chart. An uptrend is recognised by ascending peaks and troughs, while a downtrend is marked by descending peaks and troughs. These structures show order flow traders the prevailing direction of market sentiment.

Trend continuation is central to market structure trading. In an uptrend, buyers repeatedly absorb supply at higher levels, and each higher low marks a fresh trading imbalance in their favour. In a downtrend, sellers repeatedly absorb demand and push prices lower, while each lower low signals a fresh supply–demand imbalance in their favour.

That imbalance has to persist for the trend to hold. When opposing flow takes over, the run of higher highs or lower lows breaks, which often signals a shift in market structure rather than a pause.

Imbalances

Imbalances manifest as large, directional candles that break away from a consolidation area, signifying a sudden imbalance between buyers and sellers. These are often accompanied by increased volume, which may suggest a strong commitment from traders to move the price in a specific direction.

In ICT and order flow terminology, this kind of gap usually appears in the form of a fair value gap. It forms when price moves so fast that one side barely trades, leaving a three-candle gap where little business was done. Traders mark these gaps because price often returns to fill them, rebalancing the orders that were skipped. A trading imbalance that stays unfilled can act as a magnet for future price, while one that fills cleanly tends to confirm the move that created it.

Volume

Volume is directly observable on a chart, usually depicted as bars beneath the price action. High volume bars accompanying significant price moves validate the strength of that move, implying a robust interest from the market in that price level. Conversely, low volume may indicate a lack of conviction, suggesting that the price move may not be sustainable.

Volume confirmation and order flow confirmation differ. Volume shows how much traded, confirming a move had participation behind it, but not who was in control. Order flow confirmation goes further, showing whether buyers or sellers were the aggressors at each level. A volume profile bridges the two by mapping where volume built up across price, though only footprint and delta data confirm the direction of that activity.

Footprint Charts and Cumulative Delta

A footprint chart shows the volume traded at the bid and at the ask inside each price bar. It reveals who was aggressive at every level, not just where price closed. Cumulative delta then tracks the running net of that buying against selling, turning the detail into a single trend line.

Bid and ask volume sit at the centre of this. Volume traded at the ask comes from aggressive buyers lifting offers. Volume traded at the bid comes from aggressive sellers hitting bids. Delta is the difference between the two within a bar, a positive figure when buyers dominate and a negative figure when sellers do.

Cumulative delta adds each bar’s delta to a running total. A rising line shows net buying building over time, while a falling line shows net selling. The most watched signal is divergence. If price makes a new high but cumulative delta does not, the buying behind the move may be weakening. Footprint and delta data are standard in centralised futures markets, where every trade is recorded at the exchange, which is why they appear so often in order flow study.

Depth of Market (DOM)

The depth of market, or DOM, is a live ladder of buy and sell orders waiting at each price. It is also called the order book, or market depth. The bid side lists resting orders to buy below the current price. The ask side lists resting orders to sell above it. The size at each level shows where liquidity is stacked.

Reading this ladder, sometimes called DOM trading, is a form of order book analysis that aids short-term price discovery. A centralised exchange shows the full depth of the market. OTC forex does not, because there is no central book and each broker sees only its own flow. This is the main limit on order flow trading in forex, which pushes traders toward liquidity and supply-demand methods, or toward futures data as a proxy. Even on exchanges, book depth alone can read liquidity incompletely.

Interested readers can learn more about these components and how they interact with each other in our comprehensive article on order flow analysis.

Order Flow Trading Strategy Examples

Let’s now take a look at how these components can be used in three order flow trading strategies.

The three examples below are educational illustrations of how order flow concepts fit together. They are not trading recommendations, and no setup works every time. Each one shows how tools such as order blocks, liquidity and moving averages might combine in an order flow trading strategy. Any approach can be tested on a demo account.

If you are ready to try these approaches on live markets, you can consider trading with them on FXOpen’s TickTrader platform.

Liquidity Sweep at Order Block/Supply or Demand Zone

A liquidity sweep is a quick push past an obvious high or low, where stop orders and breakout orders rest, followed by a sharp reversal. The move taps that pooled liquidity, fills large orders against the crowd, then turns. Spotting the sweep and the snap-back is what separates this setup from a plain breakout.

The concept of a liquidity sweep within an order block stands out for its nuanced approach to capitalising on market reversals. This strategy hinges on the premise that price movements in these critical zones often preclude a significant direction change, making them ripe for reversal entries.

However, while leaving a simple limit order at these areas may be tempting, unforeseen news or a strong trend can cause the price to trade beyond it. Therefore, the theory states that looking for confirmation is important. Using the idea of a liquidity sweep or a bull/bear trap, traders can identify higher probability setups in these areas.

Entry

• Traders typically identify an order block, marking zones that prompted a significant imbalance and strong directional price move.
• Watching for the price to approach these zones is important, with a keen eye on the price action within the zone for signals of a potential reversal.
• The formation of new highs in a supply zone or lows in a demand zone accompanied by a liquidity sweep (a brief breach of these highs/lows followed by a quick return) might serve as a trigger for entry.
• The appearance of reversal patterns, like a shooting star, hammer, or engulfing candlestick, may indicate the market’s rejection of prices beyond the zone.

Stop Loss

• Traders could place a stop loss just beyond the boundary of the supply or demand zone.

Take Profit

• Profit targets might be set at the nearest opposing supply or demand zone, usually where another significant imbalance lies.

Moving Average Crossover at Order Block/Supply or Demand Zone

Integrating moving averages into the analysis of order blocks or supply/demand zones offers traders a quantitative lens through which market sentiment can be gauged more precisely. This strategy particularly revolves around the utilisation of two moving averages.

We’ve used Exponential Moving Averages (EMAs) with periods of 9 and 20, leveraging their sensitivity to price movements to identify potential reversal points within these critical market zones. However, traders can use whichever type or length they prefer, though a balance should be struck between responsiveness and mitigating false signals.

Note that moving averages are confirmation tools here, not order flow indicators. They read prices, not orders, so they confirm an order flow signal at the zone rather than generate one.

Entry

• The trader identifies an order block where a substantial move has previously occurred, leaving behind a noticeable imbalance in the price chart.
• As the price revisits this zone, attention is directed towards the EMAs’ behaviour. For instance, a crossover of the 9-period EMA above the 20-period EMA signals bullish momentum, whereas its crossover below the 20-period EMA reflects bearish momentum.
• Entry might be considered once the moving average crossover aligns with the anticipated direction of the reversal, indicating a strengthening trend.
• This signal might be further validated if accompanied by a liquidity sweep or specific candlestick patterns within the zone.

Stop Loss

• A stop loss could be placed beyond the zone’s extremes.
• Given the added confidence from the moving average crossover, the stop loss could also be positioned just beyond the most extreme high or low when the price entered the zone.

Take Profit

• The take-profit target might be set at an opposing supply or demand zone. Such zones are anticipated to act as natural barriers where the next significant price reaction could occur.

Impulse and Correction Stop Order

The Impulse and Correction Stop Order strategy leverages the dynamic reaction of prices at supply or demand zones, focusing on the price action that follows these pivotal areas.

Recognising that initial reactions from these zones can be sharp, signalling strong market rejection, this approach waits for a pullback or correction as a secondary entry point. This method is popular among traders looking to capitalise on the momentum shift or those who may have missed the primary reversal within the zone.

An impulse is the first sharp move out of a zone, where one side overwhelms the other. The correction is the slower pullback that follows, as price drifts back toward the zone. Often it refills the trading imbalance left by the impulse, trading through the gap the fast move skipped. That refill is what offers the second entry.

Entry

• Traders monitor for a pronounced impulse move away from a supply or demand zone, indicating strong market rejection of these levels.
• A subsequent pullback or correction phase is observed, ideally filling the imbalance left by the initial impulse. This correction signals the market’s natural attempt to retest the zone before a potential markup or markdown begins.
• A stop order might be set at the low (for bearish setups) or high (for bullish setups) that initiated the correction. This positioning aims to capture the breakout moment that confirms the market’s commitment to the new direction.

Stop Loss

• The stop loss might be placed beyond the correction. This placement is strategic, potentially minimising loss if the anticipated breakout does not materialise and the correction reverses direction.

Take Profit

• The take-profit point might be chosen within a suitable opposing zone, considering the optimal risk/reward ratio or strong support/resistance levels.

Key Takeaways

Order flow trading in forex and CFDs provides a deeper understanding of market behaviour by revealing how buyers and sellers interact through executed trades, resting orders, liquidity, and volume. By combining key concepts with tools such as the order book, footprint charts, and volume profile, traders can gain valuable insight into market sentiment and potential price direction.

While no method guarantees favourable outcomes, understanding order flow may support traders’ decisions across financial markets.

To study any order flow trading strategy on live charts, you can consider opening a trading account with FXOpen and use the TickTrader platform.

FAQs

What Is Order Flow in Trading?

Order flow represents the myriad of buy and sell orders executed in the market. It acts as a snapshot of market sentiment, showing where and how traders are placing their orders, which in turn influences price movements.

How Do Traders Read an Order Flow?

Reading order flow involves analysing the data on the volume of trades, the price levels at which they are executed, and the type of orders (buy or sell). Traders often use specialised software that visualises these data points, though they can be identified on charts through the use of order blocks and imbalances.

How Do Traders Trade an Order Flow?

Trading order flow typically involves looking for signs of imbalance between buy and sell orders and trading from order blocks. Traders often enter positions based on the anticipation that price will fill these imbalances and reverse from order blocks.

Why Is Order Flow Important in Trading?

Order flow is important because it provides insights into the immediate direction of the market, revealing the underlying demand and supply dynamics, which can be important for decision-making.

What Is the Difference Between Order Flow and Volume?

While closely related, order flow technically refers to the detailed list of transactions (buy and sell), whereas volume measures the quantity of an asset traded over a period. Order flow gives insight into the specifics of market transactions, while volume indicates the level of activity.

What Is the Difference Between Order Flow and Price Action Trading?

Order flow trading focuses on the underlying transactions that drive market movements, whereas price action trading relies on analysing the price movements themselves. Price action traders study charts for patterns and trends without necessarily considering the specific buy and sell orders that cause those movements.

What Tools Are Commonly Used for Order Flow Analysis?

The most common order flow analysis tools are footprint charts, depth of market, cumulative delta and the volume profile. Footprint charts show bid and ask volume per bar, DOM lists resting orders, cumulative delta tracks net buying against selling, and volume profile maps volume across price levels.

Can Order Flow Be Used in Forex Trading?

Yes, but with limits. Order flow trading in forex cannot draw on a full central order book, because forex trading is decentralised and each broker sees order flows of a particular broker. Traders instead read liquidity, supply and demand zones, and footprint or delta data from correlated futures as a proxy.

What Is a Cumulative Delta in Trading?

Cumulative delta is the running total of delta, where delta is ask volume minus bid volume in each bar. It shows whether net buying or selling is building over time. When price rises but cumulative delta falls, the move may lack support, a divergence traders watch for.

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