Breaking down the support and resistance lines for imbalance

[trustingturtle]

Hello! After reading through the user documentation, as well as every post on this forum I could find, I'm left with some questions.

First, as I understand it from its intended operation:

Support and resistance lines in the volume imprint strategy are formed by:

1. Finding a level of imbalance
2. Measuring if it meets the criteria of absorption, as defined in the settings.
   1. (Which is odd, considering that field "Absorption Level" is disabled even if support/resistance lines are enabled. Additionally this is not stated in the documentation, just to note for document writers. It only says "Optionally draws support and resistance lines for the first imbalance level."
3. Only drawn if the price does not move through it in the next candle

My questions are:

1. Why do some levels of no imbalance, still get highlighted as absorption levels?
2. Am I missing anything in regards to how the support/resistance lines are actually formed? I'm generally familiar with stacked imbalances, but I'm not seeing any relation to stacked imbalances (subsequent, usually 3, imbalances next to each other) in how these lines form. So want to confirm I'm not missing anything here.
3. After I've analyzed more, I'm wondering if you can still get an absorption level, that meets the qualifications of an imbalance %, but does NOT pass the delta filter, in which case it renders as an absorption level (green outline) but not an imbalance level (bold white text), at which point, a support/resistance line is not drawn. If this is the case, which from what I gather it seems to be, it's all very confusing how these things interact with each other and may be a note to improve the settings.

Or... I'm completely confused, and would love someone to straighten me out.

If you made it this far, really appreciate the help

1. 

 

[Donovan2580]

Look at this thread - It should answer most of your questions:

Footprint - Absorption

Hello, I am trying to understand absorption and imbalance better... I am wondering if anyone could help me understand the absorption levels highlighted on the chart with respect to my settings? I see both a bid and ask outline. Does the absorption level outline bid color (red) if we have...

support.motivewave.com

 

[trustingturtle]

Thanks Donovan, I actually read your thread before I posted this, and appreciated you breaking things down a bit. I'm still left with the questions I posted above though. Specifically why some levels are highlighted as absorption, but not rendered as an imbalance (bold white text). Wondering if my 3rd bullet in my questions is the actual logic as to why that is happening. It's not super critical or anything, just trying to fully understand the underlying logic. Thanks again.

 

[Donovan2580]

Ok if you take this from your screenshot



8 x 30 would be an "imbalance", but it is not absorption because of the explanation I gave in that thread.

Prices are above that 8 x 30, not below. If prices were 3 ticks below or more (According to your settings you posted) than a red resistance line would print as well as absorption.

I would also recommend your uncheck that Delta Filter box as that will add a lot of unnecessary confusion while you are trying to understand how these print