Reference

Crypto order flow glossary

Plain-English definitions of the 64 order-flow, positioning and market-structure terms used across WarRoom Terminal and its field guides.

Absorption: The process of passive limit orders filling incoming aggressive market orders, preventing price from advancing.
Accumulation: A deliberate phase where institutions build a large position over time without significantly moving the price.
Aggregate Depth: The total sum of limit order volume resting at various price levels across the order book.
Alpha Decay: The phenomenon where a trading strategy's edge diminishes as more participants discover and exploit it.
Backwardation: A market state where futures contracts trade at a discount to the spot price, indicating extreme bearish speculation.
Band Walking: When price action continuously rides along the outer boundary of a Bollinger Band during a strong trending phase.
Basis: The exact price difference between the Spot market and the Futures market.
Bid-Ask Spread: The price difference between the highest limit buy order (bid) and the lowest limit sell order (ask).
Bollinger Bands: A volatility indicator consisting of a moving average bounded by upper and lower standard deviation lines.
Book Flip: A sudden shift in order book liquidity where massive limit orders are pulled from one side and stacked on the other.
Candle Body: The thick part of a candlestick representing the open and close prices, indicating where the bulk of trading occurred.
Contango: A normal market state where futures contracts trade at a premium to the spot price, reflecting the cost of carry and leverage.
CVD: Cumulative Volume Delta—the running total of net aggressive buying and selling pressure.
Delta: The net difference between executed market buy orders and executed market sell orders in a given timeframe.
Delta Flip: A sudden reversal in aggressive order flow, changing the Delta from deeply positive to negative, or vice versa.
Divergence: When two related metrics (like price and CVD) move in opposite directions, often signaling a trend reversal.
Exhaustion: A state where the aggressive side of the market runs out of capital, causing the trend to stall.
Fade: A strategy of trading against a sudden, impulsive price movement, betting that the momentum is false and will quickly reverse.
Fair Value Gap: A structural imbalance in price action created by a rapid, one-sided movement that leaves a gap between three consecutive candles.
FOMO: Fear Of Missing Out—the emotional trigger that forces retail traders to buy at the absolute top of a parabolic move.
Funding Rate: A periodic fee exchanged between long and short futures traders to keep the perpetual contract price anchored to the spot price.
High Volume Nodes: Price levels where a significant amount of historical volume has been transacted, acting as strong structural gravity.
Iceberg Orders: Large institutional orders broken into smaller pieces to hide their true size from the public order book.
Inducement: A deceptive price movement engineered to trick retail traders into entering positions or placing stops at vulnerable levels.
Limit Order: A passive order placed in the order book to buy or sell an asset at a specific price, providing liquidity to the market.
Liquidation Cascade: A domino effect where forced liquidations (stop-losses triggering) force the price to crash, triggering even more liquidations.
Liquidity: The amount of resting capital (limit orders and stop-losses) available in the market to facilitate trade execution.
Liquidity Pool: A specific price zone where a massive concentration of stop-losses and resting limit orders has accumulated.
Liquidity Sweep: A rapid price movement designed to trigger stop-losses in a liquidity pool before reversing direction.
Liquidity Voids: Zones of rapid price displacement (like FVGs) where very little historical volume exists, offering no resistance to price movement.
Long Squeeze: A rapid price drop caused by trapped long positions being forced to sell (liquidate) their assets.
Low Volume Nodes: Price levels with very little historical volume, acting as 'frictionless' transit zones for rapid price movement.
MAE: Maximum Adverse Excursion. The maximum distance a trade went against you before it was closed. A measure of risk and stop-loss efficiency.
Maker: A trader who provides liquidity to the market by placing limit orders that rest in the order book.
Market Buys: Aggressive orders executed immediately at the lowest available Ask price, removing liquidity from the sellers.
Market Order: An aggressive order executed immediately at the best available current price, removing liquidity from the market.
Market Sells: Aggressive orders executed immediately at the highest available Bid price, removing liquidity from the buyers.
Mean Reversion: The statistical tendency for a price to eventually return to its historical average or Point of Control.
MFE: Maximum Favorable Excursion. The maximum distance a trade went in your favor before it was closed. A measure of profit-taking efficiency.
Microstructure: The granular, tick-by-tick mechanics of the market, driven by limit orders, market orders, and human psychology.
OI Divergence: When Open Interest moves in the opposite direction of the price trend, signaling a structural anomaly.
Open Interest: The total number of active, unsettled derivative contracts currently open in the market.
Order Book Depth: The visual representation of all resting limit buy and sell orders at various price levels.
Order Book Imbalance (OBI): A state where the ratio of resting limit buy orders to limit sell orders is heavily skewed to one side.
Perp: Short for Perpetual Futures contract—a derivative that never expires and uses funding rates to track the spot price.
Perpetual Futures: Synthetic derivative contracts that allow leveraged trading without an expiration date.
Point of Control (POC): The single price level where the highest amount of volume was transacted during a specific time period.
Short Squeeze: A rapid price increase caused by trapped short sellers being forced to buy back their positions to cover their losses.
Simple Moving Average: A lagging technical indicator that calculates the average price of an asset over a specific number of periods.
Slippage: The difference between the expected price of a trade and the price at which the trade is actually executed due to low liquidity.
Spoofing: Placing large limit orders with the intent to cancel them before execution, purely to deceive other traders.
Spot: The physical market where the actual underlying asset is bought, sold, and transferred.
Standard Deviation: A mathematical measurement of price volatility and dispersion from the average.
Stop-Loss: A conditional market order placed to automatically exit a position and limit potential losses if the price moves against the trade.
Taker: A trader who removes liquidity from the market by executing a market order against the resting limit orders.
Tape: The continuous, real-time stream of executed market orders (Time and Sales) showing actual completed transactions.
Trapped Trader: Participants who entered a position at the extreme top or bottom and are now facing immediate losses, prone to panic selling/buying.
TWAP: Time-Weighted Average Price—an algorithmic execution strategy that breaks a large order into smaller chunks executed at regular time intervals.
Value Area: The specific price range where approximately 70% (one standard deviation) of the total volume was transacted.
Value Area High (VAH): The upper boundary of the Value Area.
Value Area Low (VAL): The lower boundary of the Value Area.
Volatility Squeeze: A period of extremely tight price consolidation and low volatility that precedes an explosive breakout.
Volume Profile: An advanced charting tool that displays trading activity over a specified time period at specified price levels.
Volume Z-Score: A statistical measurement that compares the current volume of a candle against its historical moving average to identify extreme anomalies.