medium · Order Flow Analysis order-book-dom
A trader sees large bilateral volume (1,500 contracts on both bid and ask) at a single price level in the ES, with the market ranging within 3 ticks for 20 minutes.
What is the distinction between this and consolidation?
- Absorption occurs at session highs, while consolidation is confined to session lows.
- Absorption is always considered bullish, whereas consolidation is regarded as neutral.
- Absorption involves high active participation; consolidation involves low interest/waiting.
- There is no functional difference; both simply represent a temporary pause in overall market activity.
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