Most technical indicators derive from price: they are a consequence, not a cause. Order flow takes a step back and studies the force that actually moves the market: the interaction between buyers and sellers, that is, supply and demand in real time. It is an advanced approach that seeks to read the intention behind each candle, not just its shape.
Volume is the first layer. A price move accompanied by high volume has backing and tends to be more reliable; a move on low volume is suspicious and may run out of steam quickly. Learning to read whether a breakout comes with or without volume helps you distinguish between a genuine impulse and a trap (fakeout).
Market depth (DOM, Depth of Market) shows the limit orders waiting at different prices: how much supply and demand there is above and below the current price. Zones with large accumulated orders often act as temporary supports or resistances, because they absorb pressure. In MetaTrader 5 you can view the DOM for instruments that provide it.
Key order flow concepts include absorption (large orders that “eat up” all the opposing pressure without the price advancing, a sign of a strong participant defending a level) and imbalance, when buying or selling aggression clearly dominates and pushes the price decisively. Spotting absorption followed by a turn is one of the most valuable reads of this approach.
Order flow is especially useful for fine-tuning execution: entering when the pressure aligns with your thesis and avoiding trading against a dominant flow. It does not replace technical or fundamental analysis; it complements them by providing the “why” of the move in the present moment, with information that lagging indicators do not capture.
It is a demanding approach that requires practice and quality data, so it tends to be the territory of advanced traders. Start by observing the price-volume relationship on your usual timeframes, incorporate reading the DOM little by little, and always validate what you see with strict risk management: understanding the flow improves your odds, but it does not eliminate risk.
Sources: Bank for International Settlements (BIS), central banks, official MetaQuotes (MetaTrader 5) documentation and regulatory bodies.
