Absorption

This is a simple concept to understand but sometimes difficult to spot in the order flow. Absorption can be seen on the footprint with large volume imbalances on the Bid and the Ask. It is difficult to understand the direction of this order flow since some market participants will enter the market passively or aggressively therefore the imbalance can be on either side. Below is an excellent example in CL where we can see multiple areas of absorption,
Subscribe to read more.
Register for our trusted and in-depth premium content, update your membership or login to view the full content of this post.

Subscribe for membership