Trade Aggression Metrics

Trade aggression metrics quantify the extent to which participants are willing to cross the bid-ask spread to execute trades immediately, rather than waiting for limit orders to be filled. Aggressive buying, where participants hit the ask, is often interpreted as a sign of bullish sentiment and urgency, while aggressive selling, hitting the bid, suggests bearish sentiment.

By tracking these metrics, traders can identify the dominant force in the market and anticipate potential price shifts. These metrics are particularly useful for detecting institutional flow and high-frequency trading activity.

They provide a more nuanced view of market activity than volume alone, as they distinguish between passive liquidity provision and active, market-moving participation. It is a key tool for interpreting order flow in real-time.