What Is Absorption?

Absorption: When aggressive buying or selling doesn't move price as expected.

Imagine NQ repeatedly trades at a resistance level. Buyers keep lifting the offer, but price struggles to move higher.

One possible explanation is that sufficient sell-side liquidity is absorbing the aggressive buying.

This can be an important clue, but absorption alone isn't a short signal.

I would want to observe what happens next:

• Does price reject the level?
• Do buyers lose momentum?
• Does price move back below the area?
• Is there a clear invalidation level?

The setup becomes more interesting when the market reaction confirms the idea.

Aggression and price movement don't always tell the same story.

#Absorption #NQ #OrderFlow