The Gravitational Pull of Limit Orders

An important order flow factor to consider is the gravitational pull of limit orders. In other words, price is drawn to areas where the highest concentration of limit orders exists.

In his webinar Using Volume Supply and Demand Zones in Trading Analysis, Will Busby of Pure Financial Academy discusses how a high concentration of limit orders can attract price to it, and then later act as a level which repels the price.

As Will explains, “Price simply gravitates from one pile of order flow to the next, and repeats the process indefinitely.”

Learn more in this 2-minute video:

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