Feature request: Please add Absorption Detection Order flow Indicator

[zundradaniel]

It would be extremely useful to have an indicator that detected volume absorption at price.

This could be a stand alone indicator an an addition to the footprint charts.

For a great suggestion of how to identify absorption here is an axia futures tutorial

https://www.youtube.com/watch?v=SvgBq6FEUMU&ab_channel=AxiaFutures

[NinjaTrader_PatrickG]

Thanks for the suggestion.

If you had to describe what this indicator detects exactly and what 'volume absorption' in your own words, how would you describe it?

[zundradaniel]

HI Patrick thanks for the quick response. It can be described as the consumption of high volume market orders without accompanying price response. For example, if sellers are pushing down hard, but the price spread is small, and the level is holding up well, this is absorption. I've actually made a custom indicator that does this fairly well by dividing the cumulative delta for the bar by the open/close spread. However, I think the good folks at Ninjatrader can pull it off way better than my neophyte skills can accomplish.

[NinjaTrader_PatrickG]

I'd like to preface the rest of this conversation that it is unlikely an additional Order Flow tool to meet your exact needs would be added soon - we certainly track interest in these items, however, you may find a quicker solution by using available tools or exploring your personal options to create your own indicator or commission a third-party developer to create exactly what you desire.

Right now, with the Order Flow Volumetric bars and bar statistics, you can reproduce exactly what the video describes as absorption by looking at the total volume, bar delta, and cumulative delta prints:

• https://www.screencast.com/t/HfNbMx9H

Once you have a condition that has been determined to meet the absorption criteria, what would happen? In other words, what action, if any, should take place once the absorption condition is met?

[zundradaniel]

You're correct, this can be identified visually pretty easily. However, my primary use of the ninjatrader platform automated strategies.

[zundradaniel]

Sorry, I didn't answer your question fully. The action post absorption would be to watch and wait for the absorbing side to initiate (high delta, high volume move in the opposite direction). This is a high probability reversal trade as you now have two pieces of critical information.

1. Someone with deep pockets cares about this level
2. They have been successful in defending and are now pushing in the opposite direction which is the beginnings of a squeeze move on said direction.

But, that being said, if this is too much of an ask, I'll stick with my custom solution. Thanks for your time.

[StockTrader88]

Hi PatrickG and zundradaniel

Thanks for a great platform.

Let me try to help out clarifying something... an "Absorption Indicator" is hardly something exotic and unusual. In fact, it's build into most of the order flow platform/packages on the market. The concept of absorption is also key for any order flow related trading. I believe this is definitely something that belongs in the Order Flow+ package.

Could you please create a "formal" feature request for it?

Many thanks.

[NinjaTrader_PatrickG]

StockTrader88 , no feature request was created in this case because it's possible to view the exact absorption details that were requested already. Please review this portion of post #4:

Right now, with the Order Flow Volumetric bars and bar statistics, you can reproduce exactly what the video describes as absorption by looking at the total volume, bar delta, and cumulative delta prints:

• https://www.screencast.com/t/HfNbMx9H

If this isn't what you're looking for, could you articulate in greater detail exactly what the "Absorption indicator" you desire would do?

[zundradaniel]

By that argument some other niceties are also extraneous. If I want to see large orders, why do I need the OrderFlow Trade Detector when, I could just watch the time and sales. If I wanted to see levels of high liquidity, why do I need Order Flow Market Depth when I could just watch the ladder. Having an indicator removes the "stop and analyze" from the trading flow as the system is doing the "stop and analyze" on our behalf.

[cyborgty]

Its unfortunate when the people who design tools ignore the users (Traders) who make requests that would improve the tool/software. Sometimes its obvious a tool was created by someone that doesn't trade using it.

[NinjaTrader_DrewO]

Hello all,

I appreciate the feedback on this topic, we'll be happy to record it. Feedback from traders is very important to us and interest is tracked in these items for future consideration.

Though such an item may not be available currently, and cannot be guaranteed as a feature in a future release, keep in mind it's always possible to create custom indicators and add-on's to accomplish many things not currently included in the platform. If you're not a programmer yourself, a third party vendor could assist further with creating such an item.

[Net_Trader]

You should be able to use ("Delta BAR" - "Cumulative Delta BAR") and plot the difference on the chart, which should tell you when absorption is happening, I would imagine this is a very elementary indicator to add to Ninja Trader. Should be standard in NT8, Absorption is the basis of a lot of my setups.

[cfalevel2015]

By that argument some other niceties are also extraneous. If I want to see large orders, why do I need the OrderFlow Trade Detector when, I could just watch the time and sales. If I wanted to see levels of high liquidity, why do I need Order Flow Market Depth when I could just watch the ladder. Having an indicator removes the "stop and analyze" from the trading flow as the system is doing the "stop and analyze" on our behalf.

Hello, can you please share your custom solution?