Video summary

How I Time Reversals Using Footprint Absorption (Most Accurate Entry Setup)

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Key takeaways

Summary of the video (subtitle-based)

The speaker (Thrax) explains how he times reversal entries using footprint charts and a concept called absorption. He focuses on identifying moments when price appears to be pushed strongly, but doesn’t actually move through a key level, suggesting the aggressor is being absorbed and may be getting trapped—often preceding a reversal.

Core problem he’s addressing

  • On normal candlesticks, it can be hard to tell whether a move has already made its final high/low.
  • Footprint charts help by showing where aggressive buying/selling is happening and whether that pressure is actually moving price.

What “absorption” means (in his framework)

  • Sell-side absorption: aggressive buyers hit the ask, but price doesn’t rise (meaning buyers’ pressure is being absorbed by sellers).
  • Buy-side absorption: aggressive sellers hit the bid, but price doesn’t drop (meaning sellers’ pressure is being absorbed by buyers).

In either case, it implies hidden liquidity / positioning, and can signal potential reversal or continuation depending on context.

The reversal entry “model” (how he decides when to enter)

Thrax says he looks for absorption at important key levels (not random areas). Typically, he uses:

  1. A key level

    • Examples include prior highs/lows.
    • Later examples use Fair Value Gaps and equal highs.

  2. POC (Point of Control) location

    • The POC is the area with the most traded volume inside the footprint candle.
    • He emphasizes that the POC matters depending on which side it’s on:
      • For a short reversal, he wants the POC on the ask (right side), suggesting buyers are pushing but failing—buyers getting trapped.
      • For a long reversal, he wants the POC on the bid (left side), suggesting sellers are pushing but failing—sellers getting trapped.
    • He also stresses evaluating the POC after the candle closes, because it can change while the candle is forming.

  3. Delta flip (confirmation)

    • He watches for delta to flip (red → green or green → red depending on direction).
    • A delta flip is treated as confirmation that momentum/control shifted to the opposite side.
    • While he says you can take entries based on absorption alone, he prefers waiting for delta flip to improve probability.

Trade management / invalidation rules

  • He generally waits for:
    • the absorption candle to close, then
    • an entry on a retest of the absorption area (often “around/near the POC,” not exactly at it).
  • Stop placement: placed just beyond the absorption zone.
  • Invalidation: if price breaks past the absorption zone in the wrong direction, the setup is invalid.
  • Targets: often uses at least 1:2 risk/reward (or targets obvious swing objectives like highs/London highs).

Examples from the charts

Example 1: 5-minute timeframe (short from absorption in a Fair Value Gap)

  • He marks a 5-minute Fair Value Gap as the “area of interest.”
  • Price enters the gap and prints a candle showing sell-side absorption characteristics:
    • sellers try to push down,
    • volume/POC behavior indicates the pressure is being absorbed.
  • After the candle closes, he waits for confirmation via a delta flip.
  • He places a limit order near/above the POC for a short setup, sets a tight stop beyond the absorption zone, and aims for 1:2+.
  • He notes later confirmation signals (more absorption and delta behavior) can support holding the trade.

Example 2: 15-minute timeframe (long from absorption near equal highs)

  • He marks equal highs / resistance as the key area.
  • After price rejects and moves back down, sellers attempt to push through but fail—he identifies absorption.
  • Delta flips from negative to positive in connection with the absorption candle, providing confirmation.
  • He places a buy limit near the absorption candle’s POC area, with a stop below the absorption candle.
  • The trade aims for a clear upside target (he mentions London highs).
  • He also mentions you can adjust risk on lower timeframes while the trade unfolds (e.g., trail stop, move to break-even, scale).

General lesson from both examples

The strategy tends to “happen a lot” during the day, but the key is:

  • apply it only at proper key areas,
  • require absorption + aggression failure, and
  • strongly prefer delta flip to confirm who is trapped.

Additional tool / workflow mention

  • He recommends a platform called TOS (Thinkorswim) because it has very good replay capabilities:
    • replay in real time,
    • order-flow/DOM visibility during replay,
    • useful for backtesting with fewer issues than some choppy behavior on TradingView.
  • He suggests backtesting the entry model.

Final takeaway

Thrax’s method is an entry timing model for reversals:

  • identify key levels,
  • look for absorption using footprint POC placement,
  • confirm with delta flip,
  • enter on a retest, and
  • invalidate if price breaks the absorption zone.

Speakers

  1. Thrax (main speaker/host)

Original video