rthomson

Absorption

This script is designed to alert one to the possible presence of hidden walls, or visible, that are absorbing a lot of volume without letting price change. Therefore acting as Support and Resistance .
Release Notes: This new version of absorption measures it using Standard Deviation. You can set a minimum number of Sigma's of Absorption to be displayed. So now it will automatically adjust to the volume of the timeframe of that exchange and symbol. It will show you how much a price is supporting or resisting, by relatively how much volume it absorbs with minimal price change.
Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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Comments

Interesting i will check this one. looks promising
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This is a great tool, hat dock.
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RiverDeep RiverDeep
doff..
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Can you explain the sigma part, and how that works. Is the higher number more absorption? Thanks
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@ktuck, Sigma is a measure of number of standard deviations from the norm, so yes, here a higher number represents a higher amount of absorption. 7 is considered to be very unusually high, and in many cases just 3 is already high.
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