Passive Absorption: Heavy aggressive selling hits a support level, yet price refuses to drop because institutions absorb every contract with limit buys.
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Passive absorption is a classic order flow concept where aggressive market selling gets soaked up by passive limit buy orders at a key support level. Instead of price breaking lower, volume spikes while price stalls, often signaling institutional accumulation or trapped breakout sellers. When trading this setup on a prop firm account, managing your risk is critical. Because absorption can sometimes take time to resolve, patience helps you avoid taking early entries that eat into your daily loss limits. Wait for confirmation, such as a swift rejection or a shift in the tape, before placing your stop-loss tight beneath the absorption zone. For futures traders looking at firms like My Funded Futures, recognizing this volume behavior on the DOM or footprint charts can help refine trade timing. Feel free to share how you spot absorption in your own sessions!
