Aggressive Buyers Aggressive Sellers Passive Buyers Passive Sellers In The Order Flow

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In the context of order flow, aggressive traders and passive traders refer to different trading behaviors. Here's the difference between the two:

Aggressive Traders: Aggressive traders are active market participants who seek to execute trades quickly and take advantage of short-term price movements. They actively place market orders or trade at the current market price to ensure immediate execution.

Passive Traders: Passive traders take a more patient approach to trading and are willing to wait for favorable price levels before executing their trades. They use limit orders set away from the current market price and wait for the market to come to their desired price level.

In terms of order flow, aggressive traders remove the liquidity in the market by actively placing market orders. Their trades are typically executed immediately, which can lead to shorter-term price impacts. Passive traders add liquidity to the market by placing limit orders. Their trades are executed only when the market reaches their desired price, which can create support or resistance levels in the order book.

Both aggressive and passive traders play important roles in the market ecosystem, and their trading behaviors can influence the overall price dynamics and market efficiency.

Please note that the concepts of aggressive and passive traders can vary depending on the specific trading context or market structure.