{"id":7555,"date":"2020-09-13T16:35:56","date_gmt":"2020-09-13T16:35:56","guid":{"rendered":"https:\/\/axiafutures.com\/blog\/?p=7555"},"modified":"2024-02-09T09:28:30","modified_gmt":"2024-02-09T09:28:30","slug":"breakout-absorption-with-large-order","status":"publish","type":"post","link":"https:\/\/axiafutures.com\/blog\/breakout-absorption-with-large-order\/","title":{"rendered":"Breakout Absorption With Large Order"},"content":{"rendered":"\n

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Breakout Absorption With Large Order Introduction<\/h2>\n\n\n\n

In this blog post, we will cover breakout absorption with large order being present on the price ladder that happened in Oil recently. Many times, our breakout trades do not materialize in the direction we have expected and if we observe the price ladder carefully, we can scratch the trade and prevent unnecessary losses. This article will provide clues about what to look for when the anticipated direction does not offer the follow-through. It will be even more interesting for a reader to compare the previous article when breakout in Gold<\/a> produced the anticipated follow-through. Can you spot the difference?

The video down below provides insight into what happened on the price ladder when the break occurred.<\/a><\/p>\n\n\n\n

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Video about the breakout failure in Oil<\/figcaption><\/figure>\n\n\n\n

Breakout Absorption Context<\/h2>\n\n\n\n

We will be looking at the area of previous resistance and absorption zone at 41.80\u2019s. As you can see the 80\u2019s zone proved to be an important tipping point for buyers to defend and sellers to fail on 4 previous occasions. We are also trading on the last day when this (Sep.) contract is still liquid with rollover being just one day away.<\/p>\n\n\n\n

\"Absorption
Absorption zone in Oil breakout failure trade<\/figcaption><\/figure>\n\n\n\n

Now that we zoom into our execution zone, you can see a couple of distinguishing clues, that will give us an insight into this breakout failure. Let\u2019s zoom in on the 80\u2019s zone, particularly at the 85 level where large order has been absorbed with the first attempt and then was able to hold on the second attempt.<\/p>\n\n\n\n

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Execution zone around 41.80’s area<\/figcaption><\/figure>\n\n\n\n

Breakout Absorption Execution Zone<\/h2>\n\n\n\n

It\u2019s price ladder time. We are starting to move from 87 into 85 where 215 lots are sitting on the bid. By patiently observing price ladder action, we can identify these trading nuances:<\/p>\n\n\n\n