Absorption
Volume Profile Analysis glossary · Trading Strategies & Execution
Definition
A condition in which passive orders at a price level consume aggressive flow without price movement. Typically indicates a large participant defending the level with resting liquidity.
Absorption in plain English
Absorption is when a flood of aggressive buying (or selling) slams into a price and the price just... doesn't move. Normally heavy buying pushes price up, but here someone huge is sitting at that level with a giant standing order, quietly filling every buyer without budging — soaking it all up. It's like a firehose blasting a sponge the size of a house: tons of water goes in, but nothing sprays past. Traders watch for this because it often reveals a big player defending a price they don't want breached.
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