Variants and Entry Archetypes
This section describes the most common ways Momentum Failure & Absorption appears in live markets. These are not separate strategies. They are recurring expressions of the same underlying condition.
Each archetype answers one question only:
Is aggression failing against held liquidity?
1. Exhaustion After Acceleration
Price accelerates rapidly in one direction following expansion or news. Aggression increases, but progress slows. Despite continued effort, price fails to extend.
Look for:
- Sharp directional push with increasing aggression
- Diminishing progress per unit of effort
- Stalling near a known liquidity area
Momentum exhausts when effort no longer produces movement.
2. Absorption at Session Extremes
Price drives into a session high or low with strong participation. Aggression continues, but resting liquidity absorbs repeated attempts.
Look for:
- Multiple aggressive pushes into the same price
- Limited extension despite continued effort
- Price holding against initiative
The inability to move price exposes trapped momentum traders.
3. Failed Continuation After Breakout
Price breaks structure with momentum, then attempts to continue. Aggression persists, but follow-through fails. Price stalls or rotates back toward the breakout area.
Look for:
- Initial breakout with speed
- Continued aggression without expansion
- Loss of directional control
The failure reveals that continuation did not attract sufficient participation.
4. Stop Run Into Absorption
Price accelerates through a level to trigger stops or late entries. Aggression spikes, but absorption immediately halts progress.
Look for:
- Sudden expansion into a clear liquidity pocket
- Immediate stall after the stop run
- Failure to hold beyond the extreme
The stop run becomes fuel once momentum fails.
How to Use These Archetypes
These archetypes exist to support recognition, not decision-making. The strategy remains the same across all expressions. If aggression fails to produce progress, reversal is favored. If momentum continues to work, the strategy disengages.
Execution rules live in the next section.
Summary
Momentum Failure & Absorption expresses itself through stalled aggression. Whether the failure occurs after acceleration, at extremes, after breakouts, or following stop runs, the defining feature remains the same.
When effort fails and absorption holds, reversal becomes active. When aggression resumes effectiveness, the trade disappears.
Execution Rules are described in Stop 5.7