Goldsmith's background is somewhat shrouded in mystery, but he was known for his aggressive, large-scale trading and his ability to generate massive returns—famously making a "fortune trading Bitcoin" and later posting trade alerts that achieved over 1000% returns during the COVID-19 pandemic . Despite the controversy that later surrounded his commercial ventures, his book remains a cornerstone text for order flow traders.
Order flow analysis offers a deeper X-ray into the mechanics of the market, but it requires a solid grasp of how volume, liquidity, and momentum interact. If you'd like, let me know:
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uses historical price patterns and assumes the past repeats. Order flow asks: "What are big traders actually doing right now?" The goal is to predict future order flow by "reading sentiment" and understanding what other market participants (especially large institutions) are doing.
A combines both:
After a strong move, the tape goes quiet. Spread widens. Very small trades. Then suddenly: a large trade prints at market. That was the first mover after consolidation. Enter immediately.
A occurs when there is a significant gap in market liquidity. This can manifest as large candle bodies (momentum candles) or price gaps. These imbalances often signal large money entering the market. Smart traders look for price to return to these imbalanced areas to fill the liquidity gap. Goldsmith's background is somewhat shrouded in mystery, but
This occurs when the aggressive side pushes price too far, too fast, and runs out of fuel.
In an , traders leverage short-term imbalances between aggressive buy and sell orders to predict imminent price movements. Empirical backtesting has shown notable profitability for this approach, which systematically identifies opportunities to initiate long or short positions based on order flow dynamics. If you'd like, let me know: OrderFlowTrading
As one early adopter noted, "The primary goal is predicting future order flow in the markets by 'reading sentiment' and understanding what other market participants do". That skill—the ability to see where large money is moving before price reflects it—is the ultimate trading edge.
A hidden large order keeps reappearing at the same price in the DOM after being partially eaten. When it suddenly disappears, the supporting liquidity is gone. Expect a fast move in the direction of the last aggressive flow.