Absorption Indicator Apr 2026

In financial markets, particularly in order flow trading , an absorption indicator is a technical tool that highlights price levels where large volumes of aggressive market orders are being "absorbed" by passive limit orders.

: Absorption at a key support or resistance level often signals a potential reversal as the aggressive side "exhausts" their energy against a wall of limit orders. absorption indicator

: It monitors the interaction between market aggressors (buyers/sellers using market orders) and resting liquidity (limit orders). Absorption occurs when price movement stalls despite high trading volume because a large player is "absorbing" all the incoming orders at a specific level. In financial markets, particularly in order flow trading