Institutional Order Flow: How Big Money Actually Trades

Don't overwhelm yourself. Start with these 3 actions:

1. Track VWAP "magnet" behavior on SPY for 5 days (learn the institutional algo presence) — Here's the exercise: Every morning at 9:30 AM, write down SPY's VWAP value (available on any platform: TradingView, Think or Swim, Webull). Throughout the day, watch how often price returns to VWAP. Mark on your chart: (1) How many times did SPY touch or cross VWAP? (2) What was the maximum distance from VWAP before reverting? (3) Did price close within 0.5% of VWAP at 4:00 PM? Example: Monday 9:30 AM, SPY VWAP = $550.00. By 10:15 AM, SPY rallies to $552.50 (+0.45% above VWAP). Mark this. By 11:00 AM, SPY pulls back to $550.20 (near VWAP). Mark this. Repeat all day. You'll notice: On 3-4 out of 5 days, SPY will revert to VWAP at least 3-5 times. This isn't random—it's institutional VWAP algos executing orders. Market makers and hedge funds use VWAP as their execution benchmark. Why this works: VWAP is the "fair value" price for the day. When price deviates too far above VWAP, institutional algorithms sell (rebalancing). When price dips too far below VWAP, they buy. This creates a magnetic effect. Over 70% of institutional volume is executed via VWAP algos. Action: After 5 days of tracking, you'll see the pattern. Use it to trade: If SPY is 1% above VWAP at 2:00 PM with no news, expect mean reversion down toward VWAP. Short for scalp. If SPY is 0.8% below VWAP at 10:00 AM after morning dip, expect buyers to step in near VWAP. Long for bounce. This one observation will change how you view intraday price action forever.
2. Spot ONE iceberg order in real-time this week (learn to see hidden institutional size) — Open Level 2 order book on a liquid stock (SPY, QQQ, AAPL). Look for a price level showing modest size (500-1,500 shares bid or ask). Now watch Time & Sales tape. Does that level keep getting hit with sells (if it's a bid) or buys (if it's an ask), but the size REFRESHES? That's an iceberg order. Example: You see SPY bid at $550.00 showing 800 shares. A 1,000-share market sell order hits. Time & Sales prints 800 shares @ $550.00. You'd expect the bid to disappear (size absorbed). But instead, within 1 second, the bid at $550.00 REFRESHES to 800 shares again. Another 1,200-share sell comes in. Again, 800 @ $550 prints, and bid refreshes to 800 shares. This happens 6-8 times. Total absorbed: 6,000-8,000 shares at $550.00. But order book only ever showed 800 shares. This is an iceberg order—a large institution hiding a 10,000+ share buy order by only displaying 800 shares at a time (to avoid tipping off the market). Why you should care: When you spot an iceberg bid at $550, that's STRONG support. An institution is willing to absorb unlimited selling at that price. This is bullish—they're accumulating. Mark it. If SPY bounces from $550, you know WHY (hidden buying). If it breaks below $550 (iceberg gets pulled), that's bearish (support failed). Action: This week, spend 15 minutes watching Level 2 on SPY during market hours. Find ONE iceberg. Document: (1) Price level, (2) How many times size refreshed, (3) Total shares absorbed, (4) What happened next (bounce or break?). This skill separates amateurs (who only see 800 shares) from pros (who see the 10,000+ iceberg beneath).
3. Check block trade data BEFORE your next trade (avoid fighting whales) — Before entering your next SPY/QQQ trade, visit Unusual Whales (unusualwhales.com, free tier) or your broker's block trade feed. Look for prints >100,000 shares in the last 30-60 minutes. Ask: "Are institutions buying or selling aggressively?" Example: You're thinking of shorting SPY at $555 (looks overbought, RSI >70). STOP. Check block trades first. If you see: 3:15 PM – 250K SPY bought @ $554.80 (above VWAP), 3:30 PM – 180K SPY bought @ $555.10 (above VWAP), 3:42 PM – 320K SPY bought @ $555.50 (above VWAP), this is AGGRESSIVE institutional accumulation. Whales are paying PREMIUM (above VWAP) to get filled. This is bullish. DO NOT SHORT. If you short here, you're fighting 750,000 shares of institutional buying. You'll get squeezed. Flip the trade: Go long instead (ride the whale wave). Alternatively, if you see: 2:10 PM – 300K SPY sold @ $554.20 (below VWAP), 2:25 PM – 220K SPY sold @ $553.80 (below VWAP), this is institutional distribution. They're willing to take DISCOUNTS to exit. Bearish. Now your short at $555 is WITH the whales (not against). Much higher probability. Action: For your next 5 trades, check block data first. Track: (1) Did I trade WITH or AGAINST block flow? (2) What was my win rate when trading WITH blocks vs AGAINST? You'll find: 65-75% win rate when trading WITH institutional flow. 25-35% win rate when trading AGAINST. This simple check will double your win rate.