Absorption Indicator
What Is the Absorption Indicator?
Absorption is an on-chart indicator that shows areas with large volume traded over short time periods. Absorption is the result of aggressor buyers’ or sellers’ activity at key levels. In other words, it shows where large resting sell limit orders (sometimes iceberg orders) absorb large buying aggressors and vice versa, large buy limit orders absorb large selling aggressors.
In many cases, the absorption indicates areas where price bounces and moves in another direction.
Installation
To install the Absorption indicator, follow these steps:
- Download the Absorption indicator https://bookmap.com/addons/absorption2
- Launch Bookmap version 7.1.0 b57 (https://bookmap.com/current/beta) or newer and subscribe to at least one instrument
- Click the API plugins icon to open the API plugins configuration panel (or Settings → API plugins configuration)
- In API plugins configuration, click the “Add” button and then select the absorption-indicator-x.xx.jar from the “Select add-on file...” dialog window, click “Open” and then “Load”.
- The Absorption indicator will appear in the list of available plugins. Click on it to see the indicator’s settings, and then click on the checkbox near the indicator’s name to activate/deactivate the indicator for the instrument opened.
Configuration
Indicator’s settings are configurable for each instrument separately.
The first two editable fields allow you to choose a time period (in seconds) and size settings. The indicator works as follows: if within / time / seconds the instrument's traded volume for a certain price level was greater than / size /, a mark will be added to the chart. Buys and sells are calculated separately.
Ticking the “Automated mode” checkbox allows you to set the minimum size setting automatically. The minimum size value will be periodically updated based on calculation of standard deviation (SD) of traded volume for the last x minutes, where x is the value of the “SD interval” field. “SD multiplier” slider allows you to adjust the number of detections, the larger its value is - the fewer detections will be on the chart. When automated mode is on, the minimum size setting is unavailable for manual editing.
If the “Sound alert” checkbox is ticked, you will get a sound notification every time a new group of indicator marks is added to the active chart. You can adjust the notification text according to your preferences by editing the corresponding text field. The “?” button will show you the list of possible templates, “Reset” button will reset the notification text to default one, “Test alert” button will play test sound notifications based on your current notification settings.
The visual settings of the indicator are the same for all instruments.
“Show icons” checkbox allows to show/hide absorption icons with some offset from the place where trade happened.
“Show volume” checkbox allows you to show/hide absorbed volume numbers on the chart near the absorption icons. If several icons of the same side (buys or sells) are close to each other, only one icon with aggregated total volume for all of them will be shown on the chart.
“Icons size” allows selecting icons size in pixels.
“Icons offset” allows selecting how far the icons would be from the trade dots.
“Offset line width” allows to set the width of the dotted offset lines which connect the indicator icons to trade dots.
“Show trade dots” checkbox allows to show/hide trade dots created by the indicator.
“Dots size” allows selecting the indicator's trade dots size in pixels.
“Dots shape” allows choosing the shape of the indicator’s trade dots (round or rectangle).
Passive buyers and sellers color settings indicate the color with which the passive buyers and sellers absorptions are marked on the chart.
“Background color” allows you to choose the background color for the icons.
If you save your workspace when exiting Bookmap (or if you use the “File” → “Save workspace” option), the indicator's settings will be saved to the workspace.
You can load it later using the “File” → “Open workspace” dialog or using the “Load previously opened workspace” option on Bookmap’s startup.
An Example of Bookmap’s chart with Absorption indicator enabled:
Small green and magenta rectangles indicate the absorption levels.
Notes
The Absorption indicator supports all instruments/platforms, including futures, stocks, and crypto.
The backfill data that is provided by dxFeed is aggregated. Therefore the granularity is insufficient to show Absorption correctly, so detections on backfill data may differ from real-time data.
The volume traded during a short time frame is different between instruments and on the same instrument during the day. So if you adjust the threshold manually, you may need to update it.
Need help? Join our Discord channel https://discord.gg/uqzqf6C3
Absorption FAQ
I do not see any dots. How can I check that the indicator works?
Absorptions are shown only when the traded volume is greater than in your settings... If you see trades and still do not see Absorption icons, go to Absorption indicator configuration, and set a smaller minimum size. If it doesn’t work, disable other addons, then go to visual components and hide all chart elements. If you still do not see absorption icons - please contact us at beta@bookmap.com or via our Discord channel https://discord.gg/uqzqf6C3
What is the difference between the Absorption indicator and the current Volume Bubbles on the chart?
In Total volume mode, the bubble shows both buyers and sellers aggressors. It is not necessarily one-sided (aggressor buyers or aggressor sellers); it is not necessarily on the same price or not necessarily in a short time frame. Delta mode shows the difference between buyer and seller aggressors. The volume is not necessarily traded over a short time or at the same price.
What is the difference between the Absorption indicator and the Sweeps indicator?
Absorption indicator applies traded size threshold to each price level separately, while Sweeps indicator to all price levels together. Also Sweeps indicator shows marks on the chart only if trades happened on at least X different price levels.
Is the Absorption Indicator part of Bookmap, or will it be an additional purchase?
Absorption Indicator is available as part of the Bookmap Global+ package.