DislikedOK...lets review: "The Market" is simply a computer that matches orders, buys with sells, aggressive with passive when two parties agree upon a price to transact. For everyone that wishes to interact with "the market" you must do so by placing orders via a broker or a bank No order will be accepted until it has BOTH a price and size (volume) There are literally thousands of orders coming into the market every second of every minute during the session of any given market This "flow" of orders and their respective volumes are matched together and...Ignored
I'm trying to make sense of order flow. I was able to capture two images of the AUD/USD pair 1 second apart. It moved +0.3pips.
From what you've stated is my understanding correct based on the pictures. I've attached img1 and img 2 to this post.
IMG 1: ORDERBOOK Shows
ASK = 0.63467 / 10 Lot Size
BID = 0.63464 / 17.5 Lot Size
IMG 2: ORDERBOOK SHOWS (literally 1 second after the first picture)
ASK = 0.63470 / 10 Lot Size
BID = 0.63467 / 17.5 Lot Size
Someone has created an aggressive buy market order of 10 lots at 0.63467, or multiple people that have placed market orders at 0.63467. This has then used up the liquidity at 0.63467. The liquidity was used up and there is now a surplus of BIDS (limit buy orders). Due to this surplus, because of the supply and demand principle, there is more demand meaning that the price has now moved up to 0.63470. What I don't understand is why did it move up to 0.6347 instead of just another +0.1 pip.