Why does very imbalanced order book ask side attracts price instead of rejecting?
Posted: Sat Oct 26, 2019 1:24 am
Hello,
here is what the first minutes of INTC (intel) chart looked like (see image below=.
VERY imbalanced book with 92% ask orders, tons of limit order overhead acting like resistance, yet almost no bid order to support the price.
Yet the price went straight up.
Seing those orders ahead I would have never went long, especially after a large gap up, yet it was the thing to do and price ate most of those levels.
This is counter intuitive, could someone explain the phonomenon, and why price went in the direction with the most limit orders (resistance)? With little bid orders I would have expected the price to fall like a rock.
here is what the first minutes of INTC (intel) chart looked like (see image below=.
VERY imbalanced book with 92% ask orders, tons of limit order overhead acting like resistance, yet almost no bid order to support the price.
Yet the price went straight up.
Seing those orders ahead I would have never went long, especially after a large gap up, yet it was the thing to do and price ate most of those levels.
This is counter intuitive, could someone explain the phonomenon, and why price went in the direction with the most limit orders (resistance)? With little bid orders I would have expected the price to fall like a rock.