I have often spoken on the importance of buyer and seller activity in the movement of the markets. Logic dictates that the market will continue going up till there are more buyers than sellers and will start going down when sellers overpower buyers within the day.
Hence the proper trade would be to be with buyers when they are long and with sellers when they are short. Anything other wise will put your bias on the opposite side of the market, not really a healthy situation for our accounts.
This is also called Auction market theory. 99 % percent of individual retail traders, do not have a clue of how this principle works and get whipped around in the markets especially in intra day trading.
Order Flow helps us to level the playing field against large institutional desks, hedge funds, high frequency traders and their like by spotting their presence , actions and intentions.
I maintain again, tracking supply and demand, measuring the actual buying and selling transactions of the market is the single best predictor of future prices, therefore using order flow is the best path to consistent profits in trading.
Here is an example from our charts :
