Jigsaw Trading Blog

Spotting absorption & the reduced liquidity market

Published on: October 31, 2014

I recently got an email from a new Jigsaw user asking if there was a video specifically showing how to spot absorption on the Jigsaw tools.

This is on a number of our videos but there’s no video ‘dedicated’ to spotting absorption. Also, the markets have changed gear since mid-September and are much less liquid and much more volatile. It’s worth taking a new look at the level of absorption required to drive short term reversals in light of these changes.

This video shows goes through 1 hour of action from the 30th October and highlights the absorption as it occurs.

This video should also give you some ideas of what to do when the liquidity changes. This level of liquidity/volatility isn’t in my own personal comfort-zone and when the market switches gears, it helps to take a step back and re-assess rather than just trade through it. With the rule changes made recently by the CME to prevent market manipulation, everyone should have a look at their play-book and the market to see if a change in approach is appropriate.

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