$$ \small\textsf{DO NOT SKIP THIS SECTION. THERE ARE MANY THINGS HERE YOU MAY NOT KNOW.} $$

$$ \LARGE\textsf{HOW THE NASDAQ WORKS} $$

The information in this section while it won’t directly change the way you trade, it is still extremely valuable to understand. Please take the time to read through it. It shouldn’t take longer than five minutes.

• The NASDAQ-100 is a weighted Index of the top 100 non-financial tech companies in the world. Since it is weighted bigger companies move it more.

The price behind NQ-100 is simple:

• It takes the price of an individual stock, multiplies it by the shares and multiplies it by an adjustment factor. This is then divided by an index divisor. This is then added together with all 100 companies.

NQ Value = ( Σ(Pi × Qi × AFi) ) / D

• Pi = stock price of company i

• Qi = float-adjusted share count of company i

• AFi = adjustment factor (for weighting caps)

• D = index divisor (maintained by Nasdaq)

• Σ = sum over all 100 companies in the index

• The NASDAQ-100 has scheduled rebalancing months known as “contract rollovers,” or “quarterly rebalances.”

• MNQH25 = March 2025
• MNQM25 = June 2025
• MNQU25 = September 2025
• MNQZ25 = December 2025

• Interesting Fact
• Interesting Fact 2

$$ \LARGE\textsf{HOW THE NASDAQ MOVES} $$

This section is super important. This is going to go over concepts everyone should understand when trading order-flow. Read carefully.

There are two ways to execute your trade on the Nasdaq. Aggressively, or passively.

• Aggressive trading is one you are likely the most familiar with. This is hitting the “MKT BUY” or “MKT SELL” button on the platform you use to trade. These participants can be thought of as gas in an engine; pushing price.

• Passive trading is unique. Passive trading is setting a limit order at a price level and waiting to get filled. Passive trading is the roadblock for a car. It’s actively trying to stop price from breaking through.

$$ \small\textsf{Here comes the complex part:} $$

• IMPORTANT!!!!!: This can be visualized with the Bid, the Ask, and the Spread.

• IMPORTANT!!!!!: Passive absorbs aggressive!

So if market orders eat up limit orders, and causes the spread to increase, what actually causes us to go to the next tick? What closes the gap in the spread?

• THE ANSWER? Passive orders closing back the gap!

This is what causes the market to move. The play between traders/algorithms aggressively pushing price, and traders/algorithms adding liquidity to keep price still.

Welcome to ORDERFLOW. The process of reading orders and price movements to get insight on short term price movements. There are many ways to visualize ORDERFLOW; the D.O.M., T&S, Heatmap, and the Footprint.

In the deeper sections I will be going over what the Bid/Ask is, how orders are visualized between each tool, and what’s the quickest way to learn to trade.

$$ \LARGE\textsf{NASDAQ: ADVANCED} $$

The information here is mostly not important. These are cool rabbit holes you can go down, interesting statistics to research, and a whole lot of math.

Formulas

$$ \LARGE\textsf{NEWS EVENTS} $$

Economic Calendar