EURUSD Order Flow: Short Triggered As Buyers Exit

The EURUSD is going through its own ride to hell below the parity level with the latest order flow, identified via the OFA script pointing at further pain ahead.

The pattern I like to look out for where buyers taper off and sellers step in more aggressively has been realized, so what's left is to put on the trade and manage risk.

The proper reading of order flow can provide information advantage, and that's precisely what the OFA script does. All the heavy lifting is done automatically.

Remember, the 2 main components to watch out for in each cycle include:

1. Magnitude: A major clue that will help determine the health of a trend is the type of progress by the dominant side in control of the trend. We need to ask the following question: Are the new legs in the active buy-sell side campaign as identified by the script increasing or decreasing in magnitude?

2. Velocity: Was the new leg created after a fast and impulsive move? Or did price make a new low or high with the movement being sluggish, compressive and taking too long to form? A good rule of thumb is to count the number of candles it took to achieve a new leg.