In this paper a new approach for sequential placement of phasor measurement unit (PMU) has been proposed to monitor the power flow in transmission lines. The proposed approach is based on the real power flows and load demand in the system. Real power flow patterns at a given load have been determined using the load flow technique. As power system is continuously subjected to load variations, various load flow patterns have been obtained by increasing load at every bus. From different flow patterns different flow coverage matrices have been generated under a fixed flow coverage criterion. These flow coverage matrices have been utilized to determine the bus which covers the maximum demand of the system. The bus which covers maximum demand for various flow patterns has been selected for PMU placement. Sequential placement of PMU is considered with gradual increment in number of PMUs till whole demand of the system is covered. The proposed PMU placement technique has been tested on IEEE-14 and New England-39 bus system.