Most traders focus only on whether candlesticks rise or fall and on the moving-average golden cross/death cross, but they ignore the root cause that drives price—order flow. Candlesticks are only the result after trades are completed; order flow is the whole process of real-time market contention, and also the core source of the information gap between institutions and retail traders.

The market has only two kinds of orders: limit orders provide liquidity, while market orders push the price. Limit orders piling up form support and resistance, while a steady stream of large market buy orders will eat through the sell orders above, layer by layer—so the price naturally moves upward. Conversely, a large number of market sell orders will smash through the buy side, and the decline then begins. Delta, the net order imbalance, is the most direct yardstick for the respective strength of bulls and bears. When prices set new highs but Delta keeps weakening, that is a typical sign of bullish exhaustion, and the probability of a reversal rises significantly.

Retail traders are constantly plagued by fake breakouts and stop-loss hunting, because fundamentally they can’t understand the liquidity logic of the order book. When big players want to build positions, they intentionally suppress the price to trigger the concentrated retail stop-loss orders below, and use those passive closing orders to soak up the fills. And the “support level” retail traders see is, from the institutional perspective, simply a hunting ground to harvest liquidity.

Order flow is not mysticism—it is market microstructure. Only by understanding trade-by-trade execution and changes in the orders on the book can you tell real from false price movements, break out of the limitations of trading based purely on charts, and shift from “following price” to “reading the intent of capital.”