HOC Team
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2 min
Order Flow
When a lot of aggressive selling hits a price and the price still holds, someone is buying all of it. That is absorption.
What it looks like
High volume at one price, mostly on one side.
Strong delta in one direction, but price stops moving.
Often several bars testing the same level.
On a footprint, you will see large numbers at the bid at the low of a candle, yet the next candle does not make a lower low.
Why it matters
Passive limit orders are where large players often build positions. Aggressive traders can only push price as long as there is liquidity to take. When passive size refuses to move, the aggressors eventually run out.
How to trade it
Find absorption at a level you already care about, like a value area edge, a gamma wall or a prior high or low.
Wait for confirmation. Price should start moving away from the level and delta should flip.
Put your stop just beyond the absorption area. If it breaks, the big player is gone.
A word of caution
Absorption in the middle of nowhere is much less reliable. It also fails when the passive side finally gets filled and pulls out. Always use a stop.
In HOC Charts
The Absorption indicator marks bars where heavy volume met little price progress, and the footprint lets you confirm it at each price.
HOC Team
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