Qualifying a wall: size, age, behavior

Not all red bands are equal. A beginner sees a wall and thinks “resistance”; an order flow reader asks three questions before giving it the slightest importance. Those three questions turn a color on a screen into a trading hypothesis.

The method is the same for a buy wall below price and for a sell wall above. You always go through it in the same order.

Question 1: the size, compared with what?

A level of 200 contracts is huge in a book where the neighboring levels show 20, and ordinary in a book where they show 150. You always judge size relative to the neighboring levels and to the time of day: liquidity is thick overnight and at lunchtime, thinner at the open and around announcements.