Order Flow Imbalance (OFI) Signals - Complete User Guide

Introduction to OFI

Order Flow Imbalance (OFI) detects aggressive buying and selling pressure by analyzing the order flow in the market. Unlike simple volume analysis, OFI identifies “smart money” activity by measuring the imbalance between market buy orders and market sell orders.

Key Advantages:

✅ Detects institutional/whale activity before major price moves
✅ Identifies accumulation and distribution phases
✅ Provides early entry signals before trend confirmation
✅ Superior to standard volume indicators

Signal Types Generated:

OFI_BUY: Aggressive buying pressure detected
OFI_SELL: Aggressive selling pressure detected

Understanding OFI Signals

How OFI Works

OFI measures the net aggressive order flow by comparing:

Market Buy Orders: Orders that consume sell-side liquidity (aggressive buying)
Market Sell Orders: Orders that consume buy-side liquidity (aggressive selling)

OFI Formula: (Aggressive Buys - Aggressive Sells) / Total Volume × 100

Signal Components

Pressure Signals: Direct aggressive buying/selling detected
Reversal Signals: Sentiment shift from selling to buying (or vice versa)
Divergence Signals: OFI and price moving in opposite directions

Confidence Scoring

OFI signals include confidence scores (0-100%):

55-69%: Standard confidence (tradeable)
70-84%: High confidence (strong signals)
85-100%: Extreme confidence (rare, very strong)

Configuration Parameters

Core Settings

enable_ofi_signal: true

Master switch - Enable/disable all OFI functionality

OFI Calculation Parameters

`ofi_lookback: 20`

Purpose: Historical period for OFI analysis
Range: 10-50

Impact:

Lower (10-15): More sensitive, faster signals, more noise
Higher (30-50): Smoother signals, fewer false positives, slower response

Recommendations:

Scalping: 10-15
Day Trading: 15-25
Swing Trading: 25-40

`ofi_slope_period: 5`

Purpose: Measures OFI momentum/acceleration
Range: 3-10

Impact:

Lower: Catches momentum shifts faster
Higher: Confirms sustained momentum

Recommendations:

Fast momentum: 3-5
Confirmed trends: 7-10

Threshold Settings

`ofi_aggressive_buy_threshold: 65.0`

Purpose: Minimum % imbalance to trigger OFI_BUY
Range: 55.0-80.0

Impact:

Lower (55-60): More signals, including moderate pressure
Higher (70-80): Only extreme buying pressure

Recommendations:

High volatility markets (crypto): 60-65
Low volatility markets (stocks): 65-70
Conservative approach: 70-75

`ofi_aggressive_sell_threshold: 65.0`

Purpose: Minimum % imbalance to trigger OFI_SELL
Range: 55.0-80.0

Recommendations: Same as buy threshold

`ofi_extreme_imbalance_threshold: 75.0`

Purpose: Flags extraordinary imbalances (rare events)
Range: 70.0-85.0

Usage: Boosts confidence scores for exceptional opportunities

Signal Type Toggles

`ofi_enable_pressure_signals: true`

Direct aggressive buy/sell detection
- Most reliable OFI signal type
- Recommended: Always enabled

`ofi_enable_reversal_signals: true`

Detects sentiment shifts
- Example: Strong selling → sudden buying (potential bottom)
- Useful for: Counter-trend trading, catching reversals
- Risk: Can signal too early in strong trends

`ofi_enable_divergence_signals: true`

OFI vs Price divergence
- Example: Price falling but OFI showing buying (accumulation)
- Advanced signal type, requires experience
- Best for: Swing trading, identifying trend exhaustion

Filtering Options

`ofi_min_slope_threshold: 0.0`

Purpose: Filters weak momentum signals
Range: -5.0 to 5.0

Impact:

0.0: All signals pass
Positive value (e.g., 2.0): Only signals with positive momentum
Negative value: Only declining momentum signals

Use Cases:

Trend following: Set 1.0-3.0 (only increasing OFI)
Mean reversion: Set -3.0 to -1.0 (only decreasing OFI)

`ofi_require_volume_confirmation: true`

Purpose: Require above-average volume for signals
Recommendation: Always true for real trading; false only for testing/low liquidity markets

`ofi_min_volume_multiplier: 1.2`

Purpose: Volume must be X times average
Range: 1.0-2.5

Recommendations:

Crypto (high volume): 1.2-1.5
Low liquidity: 1.0-1.2
Institutional focus: 1.5-2.0

Confidence Settings

`ofi_min_confidence: 55.0`

Purpose: Minimum score to generate signal
Range: 50.0-75.0

Recommendations:

Aggressive trading: 55-60
Balanced approach: 60-65
Conservative: 65-75

`ofi_high_confidence_threshold: 70.0`

Purpose: Threshold for premium signals
Range: 65.0-80.0

Advanced Settings

`ofi_normalize_by_timeframe: true`

Purpose: Adjusts OFI calculations across different timeframes
Recommendation: Keep true for multi-timeframe strategies

`ofi_smooth_data: false`

Purpose: Applies moving average to reduce noise
When to enable:

Very choppy markets
Small timeframes (1m, 3m) with false signals

Drawback: Adds 1-2 bar delay

`ofi_smoothing_period: 3`

Purpose: Smoothing length (if enabled)
Range: 2-5
Recommendation: Use 3 for balance

Trading Strategy Configurations

1. Scalping Strategy (Quick Profits, High Frequency)

Objective: Capture quick OFI imbalances on small timeframes

enable_ofi_signal: true
ofi_lookback: 12
ofi_slope_period: 3
ofi_aggressive_buy_threshold: 60.0
ofi_aggressive_sell_threshold: 60.0
ofi_extreme_imbalance_threshold: 72.0

ofi_enable_pressure_signals: true
ofi_enable_reversal_signals: false    # Too slow for scalping
ofi_enable_divergence_signals: false  # Not useful for scalping

ofi_min_slope_threshold: 1.5           # Need positive momentum
ofi_require_volume_confirmation: true
ofi_min_volume_multiplier: 1.3

ofi_min_confidence: 55.0
ofi_high_confidence_threshold: 68.0

ofi_normalize_by_timeframe: true
ofi_smooth_data: false                 # Speed over smoothness
ofi_smoothing_period: 3

Best Timeframes: 1m, 3m, 5m
Exit Strategy: Quick (1:1.5 risk-reward, or opposite OFI signal)
Risk: High frequency means higher fees - ensure tight spreads

2. Day Trading Strategy (Intraday Trends)

Objective: Ride intraday OFI-confirmed trends

enable_ofi_signal: true
ofi_lookback: 20
ofi_slope_period: 5
ofi_aggressive_buy_threshold: 65.0
ofi_aggressive_sell_threshold: 65.0
ofi_extreme_imbalance_threshold: 75.0

ofi_enable_pressure_signals: true
ofi_enable_reversal_signals: true     # Good for intraday pivots
ofi_enable_divergence_signals: true   # Can catch trend exhaustion

ofi_min_slope_threshold: 0.5
ofi_require_volume_confirmation: true
ofi_min_volume_multiplier: 1.2

ofi_min_confidence: 60.0
ofi_high_confidence_threshold: 70.0

ofi_normalize_by_timeframe: true
ofi_smooth_data: false
ofi_smoothing_period: 3

Best Timeframes: 5m, 15m, 30m
Exit Strategy: Trail stop or opposite OFI signal + technical levels
Combine With: Support/resistance, moving averages

3. Swing Trading Strategy (Multi-Day Positions)

Objective: Identify accumulation/distribution for position trades

enable_ofi_signal: true
ofi_lookback: 30
ofi_slope_period: 7
ofi_aggressive_buy_threshold: 68.0
ofi_aggressive_sell_threshold: 68.0
ofi_extreme_imbalance_threshold: 78.0

ofi_enable_pressure_signals: true
ofi_enable_reversal_signals: true     # Key for swing entry
ofi_enable_divergence_signals: true   # Essential for swings

ofi_min_slope_threshold: 0.0          # All slopes valid
ofi_require_volume_confirmation: true
ofi_min_volume_multiplier: 1.4        # Need significant volume

ofi_min_confidence: 65.0              # Higher quality signals
ofi_high_confidence_threshold: 75.0

ofi_normalize_by_timeframe: true
ofi_smooth_data: true                 # Reduce noise on higher TF
ofi_smoothing_period: 3

Best Timeframes: 1h, 2h, 4h, 6h
Exit Strategy: Technical targets, trend reversal, weekly pivots
Holding Period: 2-10 days

4. Futures Trading Strategy (Leverage & Precision)

Objective: High-confidence OFI signals for leveraged positions

enable_ofi_signal: true
ofi_lookback: 18
ofi_slope_period: 5
ofi_aggressive_buy_threshold: 70.0    # Higher threshold for leverage
ofi_aggressive_sell_threshold: 70.0
ofi_extreme_imbalance_threshold: 80.0

ofi_enable_pressure_signals: true
ofi_enable_reversal_signals: true
ofi_enable_divergence_signals: false  # Avoid false signals in leverage

ofi_min_slope_threshold: 2.0          # Strong momentum only
ofi_require_volume_confirmation: true
ofi_min_volume_multiplier: 1.5        # Need strong volume

ofi_min_confidence: 65.0              # Only quality signals
ofi_high_confidence_threshold: 75.0

ofi_normalize_by_timeframe: true
ofi_smooth_data: false
ofi_smoothing_period: 3

Best Timeframes: 5m, 15m, 30m, 1h
Risk Management: CRITICAL - use tight stops, lower position size
Leverage: 3-5x maximum recommended

Timeframe-Specific Settings

1-Minute (1m) Timeframe

Market Type: Extreme scalping, high noise

ofi_lookback: 10
ofi_slope_period: 3
ofi_aggressive_buy_threshold: 60.0
ofi_aggressive_sell_threshold: 60.0
ofi_min_confidence: 55.0
ofi_require_volume_confirmation: true
ofi_min_volume_multiplier: 1.4        # Need volume on 1m
ofi_smooth_data: true                 # Reduce noise
ofi_smoothing_period: 3

Notes:

Very noisy - expect many signals
Best during high liquidity hours
Use strict volume confirmation

3-Minute (3m) Timeframe

ofi_lookback: 12
ofi_slope_period: 4
ofi_aggressive_buy_threshold: 62.0
ofi_aggressive_sell_threshold: 62.0
ofi_min_confidence: 57.0
ofi_smooth_data: false

Notes: Balanced between 1m chaos and 5m lag

5-Minute (5m) Timeframe

ofi_lookback: 15
ofi_slope_period: 5
ofi_aggressive_buy_threshold: 63.0
ofi_aggressive_sell_threshold: 63.0
ofi_min_confidence: 58.0
ofi_enable_reversal_signals: true

Notes: Sweet spot for active trading

15-Minute (15m) Timeframe

ofi_lookback: 20
ofi_slope_period: 5
ofi_aggressive_buy_threshold: 65.0
ofi_aggressive_sell_threshold: 65.0
ofi_min_confidence: 60.0
ofi_enable_divergence_signals: true
ofi_min_volume_multiplier: 1.2

Notes: Most reliable intraday timeframe

30-Minute (30m) Timeframe

ofi_lookback: 24
ofi_slope_period: 6
ofi_aggressive_buy_threshold: 66.0
ofi_aggressive_sell_threshold: 66.0
ofi_min_confidence: 62.0
ofi_enable_reversal_signals: true
ofi_enable_divergence_signals: true

Notes: Good for part-time traders

1-Hour (1h) Timeframe

ofi_lookback: 28
ofi_slope_period: 7
ofi_aggressive_buy_threshold: 67.0
ofi_aggressive_sell_threshold: 67.0
ofi_min_confidence: 63.0
ofi_smooth_data: true
ofi_smoothing_period: 3

Notes: Strong reliability, fewer false signals

2-Hour (2h) Timeframe

ofi_lookback: 30
ofi_slope_period: 7
ofi_aggressive_buy_threshold: 68.0
ofi_aggressive_sell_threshold: 68.0
ofi_min_confidence: 65.0
ofi_extreme_imbalance_threshold: 77.0

Notes: High confidence for position trades

6-Hour (6h) Timeframe

ofi_lookback: 35
ofi_slope_period: 8
ofi_aggressive_buy_threshold: 70.0
ofi_aggressive_sell_threshold: 70.0
ofi_min_confidence: 67.0
ofi_min_volume_multiplier: 1.5

Notes: Major accumulation/distribution only

1-Day (1d) Timeframe

ofi_lookback: 40
ofi_slope_period: 10
ofi_aggressive_buy_threshold: 72.0
ofi_aggressive_sell_threshold: 72.0
ofi_min_confidence: 70.0
ofi_enable_divergence_signals: true
ofi_extreme_imbalance_threshold: 80.0

Notes:

Use for major position entries
Combine with weekly/monthly chart analysis

Signal Actions & Broadcasting

Understanding Signal Action Types

The bot can handle OFI signals in two ways:

1. Automated Trading (`supported_volatility_action`)

Signals in this list will execute trades automatically

supported_volatility_action:
  - "BUY"          # Standard buy signal (from other indicators)
  - "SELL"         # Standard sell signal
  - "PUMP"         # Extreme bullish signal
  - "CRASH"        # Extreme bearish signal
  - "OFI_BUY"      # Add this to auto-trade OFI buy signals
  - "OFI_SELL"     # Add this to auto-trade OFI sell signals

2. Broadcasting Only (`supported_volatility_action_broadcast`)

Signals in this list will only send notifications (Discord/Telegram/WhatsApp)

supported_volatility_action_broadcast:
  - "BUY"
  - "SELL"
  - "PUMP"
  - "CRASH"
  - "OFI_BUY"      # Broadcast OFI buy signals
  - "OFI_SELL"     # Broadcast OFI sell signals

Configuration Strategies

Strategy A: Auto-Trade OFI Signals (Aggressive)

supported_volatility_action:
  - "OFI_BUY"
  - "OFI_SELL"
  
supported_volatility_action_broadcast:
  - "PUMP"
  - "CRASH"

Use When:

You trust OFI signals completely
Running tested, optimized parameters
Automated trading strategy

Risk: High - all OFI signals execute immediately

Strategy B: Broadcast OFI, Trade Confirmed Signals (Balanced)

supported_volatility_action:
  - "BUY"          # Trade only confirmed multi-indicator signals
  - "SELL"
  
supported_volatility_action_broadcast:
  - "OFI_BUY"      # Monitor OFI signals manually
  - "OFI_SELL"
  - "PUMP"
  - "CRASH"

Use When:

Testing OFI in live markets
Want manual oversight
Combining OFI with other indicators

Benefit: Get alerts but maintain control

Strategy C: Broadcast All, Trade High-Confidence Only (Conservative)

# Set ofi_min_confidence: 70.0 to filter for quality

supported_volatility_action:
  - "OFI_BUY"      # Only trades if confidence ≥70%
  - "OFI_SELL"
  
supported_volatility_action_broadcast:
  - "BUY"          # Broadcast lower-confidence signals
  - "SELL"
  - "OFI_BUY"
  - "OFI_SELL"
  - "PUMP"
  - "CRASH"

Use When:

Capital preservation priority
Want to see all signals but trade selectively

Strategy D: OFI for Alerts Only (Manual Trading)

supported_volatility_action:
  - "BUY"          # Trade other strategy signals
  - "SELL"
  
supported_volatility_action_broadcast:
  - "OFI_BUY"      # Get OFI alerts on phone
  - "OFI_SELL"

Use When:

Manual discretionary trading
Using OFI as supplementary confirmation
Learning OFI behavior before automation

Broadcasting Best Practices

Discord Setup: Best for detailed OFI analytics (includes confidence, slope, volume data)
Telegram: Good for mobile alerts with quick trade decisions
WhatsApp: Personal alerts, lower frequency recommended
Alert Fatigue: On 1m-5m timeframes, consider:
- Higher confidence thresholds (65-70)
- Broadcasting only extreme imbalances
- Using separate channels for different timeframes

Best Practices & Tips

Getting Started with OFI

Start with Broadcast Only
- Run for 1-2 weeks observing signals
- Note false positives and adjust thresholds
- Test on demo/paper trading first
Optimize Per Asset
- Each market has different OFI characteristics
- Bitcoin: Higher thresholds (65-70)
- Altcoins: Lower thresholds (60-65) acceptable
- Stocks: Higher confidence needed (65-70)
Time-of-Day Matters
- OFI works best during high-liquidity hours
- Avoid signals during market opens, low volume periods, major news events

Combining OFI with Other Indicators

Signal: OFI_BUY + RSI oversold (< 30)
Action: Strong reversal potential

Signal: OFI_BUY at major support level
Action: High-probability bounce

Signal: OFI_SELL at high volume node (resistance)
Action: Distribution confirmed

Signal: OFI_BUY + price above 50 EMA
Action: Trend continuation confirmed

Common Mistakes to Avoid

Setting Thresholds Too Low
Result: Signal spam, over-trading
Fix: Start at 65%, adjust down only if needed
Ignoring Volume Confirmation
Result: False signals on low liquidity
Fix: Always keep ofi_require_volume_confirmation: true
Using Divergence Signals on Fast Timeframes
Result: Whipsaws on 1m-5m
Fix: Divergence only on 1h+
Over-Optimizing Parameters
Result: Strategy works in backtest, fails live
Fix: Use default values, make small adjustments
Trading OFI Against Major Trend
Result: Catching falling knives
Fix: Use higher timeframe context (e.g., 1h trend for 5m OFI signals)

Performance Monitoring

Track these metrics weekly:

OFI Signal Win Rate: [Target: >55%]
Average Confidence of Winners: [Target: >65]
Average Confidence of Losers: [Track if < 60, adjust min_confidence]
Signals Per Day: [Adjust thresholds if too many/few]
Best Performing Timeframe: [Focus optimization here]

Advanced Techniques

# Multi-Timeframe OFI Confirmation
# Check 15m for OFI_BUY, confirm with 1h
# Execute on 5m timeframe
# Strongest signals have alignment across 3 timeframes

OFI Clustering

When multiple OFI_BUY signals cluster within 30 minutes:
= Institutional accumulation likely
= Increase position size by 30-50%

OFI + Order Book Depth

OFI_BUY + Large bid walls appearing = Whale accumulation confirmed = Very high probability setup

Troubleshooting

Problem	Likely Cause	Solution
No signals generating	Thresholds too high	Lower to 60-62
Too many signals	Thresholds too low	Raise to 68-70
All signals losing	Wrong timeframe	Try 15m instead of 1m
Signals lag price	Lookback too high	Reduce to 15-18
False reversals	Enable reversal too soon	Disable for faster timeframes
Low confidence scores	Volume multiplier too high	Lower to 1.1-1.2

Quick Reference: Recommended Presets

Conservative (Low Risk)

ofi_aggressive_buy_threshold: 70.0
ofi_min_confidence: 65.0
ofi_min_volume_multiplier: 1.4
ofi_enable_reversal_signals: false

Balanced (Default)

ofi_aggressive_buy_threshold: 65.0
ofi_min_confidence: 60.0
ofi_min_volume_multiplier: 1.2
ofi_enable_reversal_signals: true

Aggressive (High Frequency)

ofi_aggressive_buy_threshold: 60.0
ofi_min_confidence: 55.0
ofi_min_volume_multiplier: 1.1
ofi_enable_reversal_signals: true
ofi_enable_divergence_signals: true

Final Notes

OFI signals are most powerful when volume confirmation is enabled
Always backtest parameter changes before live trading
OFI works best in trending markets, less reliable in tight ranges
Combine with risk management: stop losses are mandatory
High confidence OFI signals (>70%) are rare but extremely valuable

Order Flow Imbalance (OFI) Signals - Complete User Guide

Introduction to OFI

Key Advantages:

Signal Types Generated:

Understanding OFI Signals

How OFI Works

Signal Components

Confidence Scoring

Configuration Parameters

Core Settings

OFI Calculation Parameters

ofi_lookback: 20

ofi_slope_period: 5

Threshold Settings

ofi_aggressive_buy_threshold: 65.0

ofi_aggressive_sell_threshold: 65.0

ofi_extreme_imbalance_threshold: 75.0

Signal Type Toggles

ofi_enable_pressure_signals: true

ofi_enable_reversal_signals: true

ofi_enable_divergence_signals: true

Filtering Options

ofi_min_slope_threshold: 0.0

ofi_require_volume_confirmation: true

ofi_min_volume_multiplier: 1.2

Confidence Settings

ofi_min_confidence: 55.0

ofi_high_confidence_threshold: 70.0

Advanced Settings

ofi_normalize_by_timeframe: true

ofi_smooth_data: false

ofi_smoothing_period: 3

Trading Strategy Configurations

1. Scalping Strategy (Quick Profits, High Frequency)

2. Day Trading Strategy (Intraday Trends)

3. Swing Trading Strategy (Multi-Day Positions)

4. Futures Trading Strategy (Leverage & Precision)

Timeframe-Specific Settings

1-Minute (1m) Timeframe

3-Minute (3m) Timeframe

5-Minute (5m) Timeframe

15-Minute (15m) Timeframe

30-Minute (30m) Timeframe

1-Hour (1h) Timeframe

2-Hour (2h) Timeframe

6-Hour (6h) Timeframe

1-Day (1d) Timeframe

Signal Actions & Broadcasting

Understanding Signal Action Types

1. Automated Trading (supported_volatility_action)

2. Broadcasting Only (supported_volatility_action_broadcast)

Configuration Strategies

Strategy A: Auto-Trade OFI Signals (Aggressive)

Strategy B: Broadcast OFI, Trade Confirmed Signals (Balanced)

Strategy C: Broadcast All, Trade High-Confidence Only (Conservative)

Strategy D: OFI for Alerts Only (Manual Trading)

Broadcasting Best Practices

Best Practices & Tips

Getting Started with OFI

Combining OFI with Other Indicators

Common Mistakes to Avoid

Performance Monitoring

Advanced Techniques

OFI Clustering

OFI + Order Book Depth

Troubleshooting

Quick Reference: Recommended Presets

Conservative (Low Risk)

Balanced (Default)

Aggressive (High Frequency)

Final Notes

📎 Related Topics

`ofi_lookback: 20`

`ofi_slope_period: 5`

`ofi_aggressive_buy_threshold: 65.0`

`ofi_aggressive_sell_threshold: 65.0`

`ofi_extreme_imbalance_threshold: 75.0`

`ofi_enable_pressure_signals: true`

`ofi_enable_reversal_signals: true`

`ofi_enable_divergence_signals: true`

`ofi_min_slope_threshold: 0.0`

`ofi_require_volume_confirmation: true`

`ofi_min_volume_multiplier: 1.2`

`ofi_min_confidence: 55.0`

`ofi_high_confidence_threshold: 70.0`

`ofi_normalize_by_timeframe: true`

`ofi_smooth_data: false`

`ofi_smoothing_period: 3`

1. Automated Trading (`supported_volatility_action`)

2. Broadcasting Only (`supported_volatility_action_broadcast`)