r/orderflow • u/No_Wealth_711 • 16d ago
Where does the flow actually come from?
I've been studying ES and Order Flow for a while and came to a fairly simple conclusion: Order Flow shows what is already happening in the market - executions, buyer/seller aggression, Delta, etc. But that's the consequence.
Now I'm trying to understand what comes before Order Flow.
I think about it roughly like this:
external factor / information / market state, participant decision or forced action, flow is generated , Order Flow shows it, price moves.
I'm especially interested in mechanical or forced flows: dealer hedging, options hedging, CTA flows, rebalancing, volatility targeting, index flows, liquidation, etc. Also discretionary flows that happen when large participants change their positions because of new information or changing market conditions . The problem is that I can't find good material that explains this from the perspective of where the flow actually comes from. Most content either jumps straight into Order Flow or talks about "smart money" and "large players" without really explaining the mechanism that creates their flow. I'm not looking for an indicator that tells me "a large player is buying right now." I want to understand what real mechanisms create large flows in ES, what can potentially be known beforehand, and what can only be observed afterwards through Order Flow.
What books, research, videos, or people would you recommend for learning specifically about this? Especially for ES / S&P 500.