Gold Orderflow Validator (Absorption Efficiency Shift )

Gold Orderflow Validator — Absorption • Efficiency Shift • Expansion

This indicator is designed to validate market behavior, not to generate mechanical buy/sell signals.
It translates order-flow concepts used by professional traders into a clean, chart-based framework that can be used alongside footprint, volume, and price action analysis.

The core objective of this tool is to help traders identify when the market is being constrained, when it changes regime, and when expansion is likely to begin.

Conceptual Foundation

Markets move through three distinct phases:

Absorption – when effort increases but price fails to progress

Acceptance (Efficiency Shift) – when the market agrees on a new price area

Expansion – when price moves efficiently with reduced opposition

This indicator focuses on identifying these phases as a sequence, rather than treating them as isolated signals.

Key Components
1) Absorption Detection

Absorption occurs when:

Volume increases significantly

Candle wicks dominate

Price fails to expand meaningfully

This typically indicates that liquidity is being absorbed and price is being deliberately held.
Absorption is a contextual warning, not an entry signal.

Displayed as: ABS

2) Price Efficiency Shift

An efficiency shift identifies a regime change in the market:

Candle range expands relative to ATR

Candle body becomes dominant

Closing price occurs near the extreme of the bar

This reflects price acceptance — the point at which the market stops negotiating and begins moving decisively.

Displayed as: SHIFT↑ or SHIFT↓

3) Last Absorption → Expansion Sequence

This is the highest-quality condition the indicator identifies.

When:

Absorption occurs first

An efficiency shift follows within a defined window

Price breaks and holds beyond the absorption area

The market has likely completed accumulation/distribution and entered an expansion phase.

This sequence is intentionally conservative and aims to highlight high-conviction movement, not early prediction.

Displayed as: A→SHIFT ✅

How to Use the Indicator

Use Absorption to identify when the market is constrained and avoid premature entries.

Use Efficiency Shift to recognize a genuine change in market behavior.

Use the A→SHIFT sequence as confirmation that expansion is underway.

This indicator is best used:

As a confirmation tool, not a standalone system

In combination with footprint, volume profile, and higher-timeframe structure

For Gold (XAUUSD / GC) where false breakouts and liquidity events are common

What This Indicator Is Not

It is not a buy/sell signal generator

It does not predict tops or bottoms

It does not repaint signals on closed candles

All signals are generated only after candle close to ensure structural integrity.

Ideal Use Case

Context validation before entering trades

Confirming whether a breakout is genuine or transitional

Understanding when price is transitioning from balance to expansion

Final Notes

This indicator is intentionally minimal and conservative.
Its value lies in filtering noise, not increasing trade frequency.

Used correctly, it helps align traders with real market behavior rather than reactive price patterns.