⭐ CLASS 20 — Deep Institutional Microstructure: Execution Algorithms, Absorption, Icebergs, Spoofing, Latency, and Real Flow vs False Flow

How to identify the true flow of institutions, differentiate legitimate intentions from manipulation, and interpret invisible signals in microstructure (DOM, T&S, footprint, spoofers, absorption, and latency).

This is one of the most important classes in the entire method.

📌 1. DEEP MICROSTRUCTURE — THE INVISIBLE BATTLEFIELD

The macro structure (trend, BOS, liquidity) is merely the consequence.

The cause lies in microstructure, where institutions:

  • execute giant orders

  • hide liquidity

  • test the market

  • manipulate reaction

  • force fill-ins

  • create localized traps

In this class, you will learn to see how the big players really operate.

📌 2. TYPES OF INSTITUTIONAL ORDER AND WHAT EACH CAUSES IN PRICE

🔷 1. Iceberg Orders

Large order divided into several small ones.

  • Typical Signal:

    • several small orders with exactly the same size

    • repeated multiple times

    • no matter how much it hits, liquidity does not end

  • Effect:

    • strong absorption

    • real level defense

    • beginning of institutional accumulation/compression

🔷 2. Spoofing (Liquidity Faking)

The institution places false orders in the DOM to influence behavior.

  • Signals:

    • large orders appear and disappear in less than 100–300 ms

    • orders appear only when the price approaches

    • orders move along with the price

  • Effect:

    • emotional induction

    • false sense of buyer/seller pressure

    • variation of the “ghost” flow

3. Sniping / Sniper Orders

Flash executions, milliseconds before a breakout.

  • Effect:

    • breaks liquidity violently

    • extremely reliable BOS

    • instant regime change (LL → HL-HV)

4. Selective Absorption

The institution receives all aggressive flow and does not let the price move.

  • Signals:

    • huge prints in T&S without displacement

    • candles with short body and many exchanges

    • level that does not yield

  • Effect:

    • trap for aggressive operators

    • silent redistribution

    • moves the market when it decides

📌 3. REAL FLOW VS FALSE FLOW

Operators lose money because they believe in false flow, which is:

  • spoofing

  • small artificial order

  • behavior induction

  • false micro pullbacks

  • forced liquidity

⚠ False flow tends to appear near: equal highs/lows, obvious liquidity zones, narrow FVG, small OB, moments without real volume (LL-HV).

🟦 HOW TO IDENTIFY REAL FLOW

  • Real flow has:

    • Consistent liquidity consumption

    • Delta following direction

    • Candles moving with little wick

    • T&S with large and repetitive prints

    • OB strongly respected

    • Clean mitigations

  • False flow has:

    • large wicks

    • inconsistent directions

    • ghost volume

    • small prints

    • orders appearing and disappearing

📌 4. LATENCY: THE INVISIBLE ELEMENT THAT KILLS TRADERS

Latency is the time between: what you see and what is really happening.

Institutions operate with microsecond latency. Traders use platforms with a delay of 100–300 ms.

  • Practical effects:

    • you see the breakout after it happened

    • you enter at the bottom of the movement

    • you buy liquidity created to catch you

    • OB seems to fail but was respected in the “institutional real time”

📌 5. HOW INSTITUTIONS TEST THE MARKET

If you want the practical truth, this is it:

  • Test 1 — Absorption Test: They throw aggressive flow against a level to see if there is absorption.

  • Test 2 — Escape Test: They create false breakouts to see how much liquidity they release.

  • Test 3 — Speed Test: They release contracts to measure book reaction.

  • Test 4 — Depth Test: They assess if there is liquidity behind the DOM.

  • Test 5 — Continuation Test: After a breakout, they check if there is institutional follow-through.

When no test confirms, the movement is reversed.

📌 6. HOW TO READ T&S AND FOOTPRINT IN AN INSTITUTIONAL WAY

These two indicators are very poorly utilized.

🔸 The flow does not matter by itself. What matters is:

  • ✔ Flow + price displacement: If the price does not move even with many prints $\rightarrow$ absorption.

  • ✔ Consistent Delta:

    • Positive Delta + green moving = real buy

    • Positive Delta + stopped candle = spoofing/institutional absorbing

  • ✔ Large aggression clusters: See a block of 300–500 contracts being hit at a specific point $\rightarrow$ institutional level.

  • ✔ Imbalance footprint: Large asymmetry indicates real interest.

📌 7. PRACTICAL EXAMPLES OF INSTITUTIONAL READING

🔷 EXAMPLE 1 — Iceberg holding trend

  • Signals: 50, 50, 50, 50 appear multiple times; aggressive prints fail to break; candle with minimum lower wick.

  • Result: $\rightarrow$ compression $\rightarrow$ explosion $\rightarrow$ reliable BOS

🔷 EXAMPLE 2 — Spoofing deceiving traders

  • Signals: a 90 BTC order appears; price gets close; order disappears; long wick; false breakout.

  • Result: $\rightarrow$ sweep $\rightarrow$ reversal $\rightarrow$ FVG is created

🔷 EXAMPLE 3 — Absorption before the real breakout

  • Signals: large prints without displacement; short wick; high repeated volume; after 2–3 absorptions $\rightarrow$ clean expansion.

  • Result: $\rightarrow$ perfect entry on the OB retest

📌 8. THE DEFINITIVE PROTOCOL FOR IDENTIFYING REAL FLOW

  1. ✔ 1. Identify if there is absorption: If so $\rightarrow$ institutional present.

  2. ✔ 2. See if the prints are consistent: Small $\rightarrow$ retail / Large $\rightarrow$ institutional.

  3. ✔ 3. Compare delta with displacement: Does Delta follow the price? Yes $\rightarrow$ real flow / No $\rightarrow$ false movement.

  4. ✔ 4. Look for the dominant cluster: It is where the price will react.

  5. ✔ 5. Observe anomalous repetitions: Many identical prints $\rightarrow$ iceberg / Orders disappearing quickly $\rightarrow$ spoofing.

9. HOW TO OPERATE ON MICROSTRUCTURE

  • 🔥 Entry in Confirmed Absorption:

    • wait for the aggression to fail

    • wait for the price to attempt to break and fail

    • enter on the absorption retest

    • short SL behind the block

  • ⚡ Post-Sniper Order Entry:

    • clean breakout

    • explosive volume

    • aligned delta

    • quick retest $\rightarrow$ aggressive entry

  • 📉 Anti-spoofing Entry:

    • identify false order

    • wait for it to disappear

    • enter against the fake direction

  • 💧 Entry in iceberg:

    • detect repetition of the same sizes

    • candles with short body

    • trigger: displacement after exhaustion of aggressors

📌 10. EXERCISES FROM CLASS 20

  • EXERCISE 1 — Identification of Iceberg: Open a replay. Mark where repeated and stable orders appear.

  • EXERCISE 2 — Differentiate Spoofing from Real Flow: List 5 signals for each.

  • EXERCISE 3 — Practical Absorption: Find a level where the price did not move despite strong aggressions.

  • EXERCISE 4 — Sniper Breakout: Capture an extremely clean breakout and classify your signals.

  • EXERCISE 5 — Delta vs Price: List 10 situations where it diverges and state whether it is real or false flow.