Jack P_ Scott

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What is flow-driven trading by institutions?

Institutional desks often move markets not by speculation but by executing large client flows. For example, a multinational corporation converting billions of USD to EUR will create temporary imbalances. Institutional traders may hedge, stagger, or internalize such flows, impacting price short-term. Hedge funds monitor and sometimes exploit these patterns. Retail traders may notice unusual moves without news, often flow-driven. Understanding institutional flow helps explain sudden volatility and prevents retail traders from misinterpreting price moves as technical breakouts when they are liquidity events.