Original subtitles

Price imbalance is a very important concept to understand

as it can be incredibly powerful. So imbalances occur

when either buyers or sellers take control over a particular

piece of price action. Where essentially it leaves gaps in

the market. That price will eventually come back to in the

future so we can rebalance price before either continuing

or continuing in that direction. So when we learn at

a bearish imbalance it means sellers have been mostly

dominant um in in moving price down and the buyers haven't had

a chance to get involved. So the same is true for when we

see a bullish imbalance. Buyers take control and the sellers

don't get involved um in the majority of that move. So

imbalances occur on every single time frame. So from the

monthly all the way down to even you know a seconds time

frame. Er you'll see it happen on on every time frame. And

once you go through your chart just to see how this works. You

will start to view the markets differently and realise how

price refills these imbalances sometimes perfectly to a tee

before you know continuing in the other direction. Price

imbalance is when we either get a large momentous candle or

where wicks are not meeting. So the easiest way for me to show

you this is with the example below where we're gonna look at

three bullish or bearish candles in a row. So if we look

at this example here we have three bearish candles in a row.

Okay so it's all selling pressure. Now this would be

classified as a balanced bit of price action because if we look

at the wicks, you can see they're meeting. So, what does

that mean? Well, if we look at the the low of this first

candle wick, you can see it was down here. We then had price

come up and we had this candle coming down. And then the top

of the third candle is meeting with the bottom of the first

candle. So, you can see there's no imbalance that has been

left. So, price has come down pulled back a little bit come

down again and then it's pulled back to rebalance and meet the

bottom of this wick here with the top of the third wick as

you can see now an imbalance would be here so we have the

exact same thing with three candles but you can see how the

top of the the bottom of the first wick here is not meeting

with the top of the third wick so this whole move from this

week to this week. This bit of um trading in here. This

selling pressure is called an imbalance. So you can see where

the wicks are not meeting. So that's basically what an

imbalance is. And we have the bullish example here. So we

have three bullish candles in a row. This is a balanced bit of

price section because the top of the first wick is meeting

with the bottom of the third wick. So it's balanced and

another word for it is is efficient. So it's efficient

price action. This is inefficient. This is efficient.

Now and the imbalance you can see the same thing we we have

AA gap from the top of the first week to the bottom of the

third wick. So this is the imbalance in here. Now what I'm

gonna do is go through Euro USD. Let's go onto that now.

And I'm just gonna go through a month's worth of you know data

on the hourly time frame and you can see some examples. So

I've drawn out some imbalances and some order blocks. So let's

go through it. So zoom in right into this bit of price section.

You can see we have the three candles coming down. Okay so

one two and three. A bearish push. If we take the low from

the first candle which is here and the height you can see this

is an imbalance and I've put it on so the line here from this

wick to this wig you can see let me just get on

So from here to here this is an imbalance. Okay? So price is

likely to refill that before continuing. But if we also see

this this push down broke structure and we have an order

block which will be the last up move refined down to this

candle. Price tapped in. Before then you're continuing. As you

can see. We tap in. We rebalance that bit of

efficiency. Inefficiency sorry and then we continue after

tapping into the order block. This bit of price action here

you can see we've low, high, low, high. We're sort of

pulling back each time we're making lows. So we can classify

this as you know efficient price action because all the

wicks are sort of meeting with these pushes down. Which would

be more seen on a lower time frame. These um efficient price

action sort of moves. But continuing on the next bit is

here. So we have a breaking structure. We have three

bearish candles. So if we look at the low of this candle then

the higher the third. This would be the imbalance. So you

can see we also have have an order block which will be here

because the momentum came in here. So price comes all the

way down here and then we eventually come back up pull

back. We come up again and we rebalance. So you can see this

wick here. Rebalances that inner efficiency perfectly. Now

we do fall just short of the order block but we could refine

it down on a 15 minute time frame and you know get involved

in that trade. And yeah so if you look here we have a low

lower high the price then impulsively breaks structure

here and we get three bullish candles in a row but if we look

at this candle so one two and three we take the high of this

candle and the low we can see we have imbalance price then

pushes up pulls back it just taps into that imbalance but it

it leaves quite a lot left to er refill. We then break

structure. We tap into this imbalance before rejecting. We

form some liquidity around this area but then we do eventually

tap into it. And you can see the bottom of the imbalance is

here. We have an order block. The price come down to tap into

the order block to rebalance that inner efficiency perfectly

before continuing. So this would be a very nice trade that

we can get involved with. But if we just move on after

tapping in we break structure and you can see from here so we

have 123 again three candles the high and the low you can

see we're meeting so this is what we call efficient price

action so as prices come down now this week on a lower time

frame it'll obviously be you know bearish candles we can

classify this as you know efficient so price can come up

from here. We can move up to new highs as we as we did. So

the next bit is here. The higher this candle to the low

only a little bit of imbalance but you can see price wicked

down um before you know continuing to the upside. Next

bit is here so the high and the low. This would be the

imbalance price comes down with this wick. Excuse the drawings.

But then ultimately we continue up before pushing down. Now

with imbalances it won't always er refill price completely to

like 100 percent. What I've seen from my testing is if we

get a an imbalance and it it comes down to refill it by at

least 50% then that can be enough for price to then

continue. Um in that direction that we're looking at. So it

won't always refill price all the way. Now another thing is

it won't always if we get a certain impulsive move up um

like this. So this is a good example. So we have this

impulsive move up but you can see price never come back down.

To rebalance it. Now this just means that it can be used for a

later date. They won't always all straight away. So that's

just something to keep in mind. But if we just continue, you

can see we push down. We have three candles here. You know

low momentum candle but we do have an imbalance. Price comes

up to mitigate as I was saying to at least 50% then continued

but then we do see some bullish pressure breaking structure.

And this is the imbalance that I was talking about. That you

know we have a lot of buying pressure here. Price never

comes back down to test it. We just continue up. But if we

continue we can see we push up. We have one candle here which

would be a bit of imbalance on a lower time frame. But then

this sort of move up we have imbalance. Price comes down to

mitigate most of it. But ultimately most of this move is

efficient. We then impulse outbreaking structure and we

also have this little bit of imbalance that price feels

here. We have efficient price action with these wicks. But we

do have an order block. So price come down eventually

tapping into that order block. So the last down counter which

is here. We tap in before continuing. Er nimmt mich auf

die sowie

And you can see we we are on this pair we are clearly

bullish. So we're not coming below the higher lows. And you

know we're respecting these order blocks that are forming.

So again we break structure to the upside. We have the high of

this candle to the low which is an imbalance. Price comes back

down to rebalance. We tap into the order block and you can see

we tap in three or four times. We push off and then we come

back down to mitigate to the 50% or just um you know around

7075 percent of the order block before continuing. The next

imbalance would be from this wick to this wick. So this

whole move is just nothing but buying. Which you know we had

this push down which was mitigating this move. So this

was just probably a news candle. But yeah moving on.

This is all efficient. You can see how the wicks are you know

matching. They're meeting with each sort of move. And free

candles here. Wick to wick. You know it's efficient price

action. So moving on. We have here sort of one two three.

This imbalance price comes down perfectly. Which would be seen

you know more in a lower time frame. But we come to balance

price. We push up. Push back down. And then we have an

imbalance here. Price comes up but then ultimately just breaks

right through it impulsively. So let's keep an eye on this

bit of price for a future movement. So we have an

imbalance and we have a clear imbalance here as well. Which

you can see price comes down. Okay so moving on we break

structure. The high and low price comes down to mitigate

pushes back up and then we do see price. Move to the downside

but as we broke structure here we could take the last up move.

Refine it down to this candle. Price tapped into an order

block. And if you wanna say we had an imbalance we could argue

from this low to this high. A little imbalance. Only little

but you know we still come up to refill that. We have an

imbalance here so a lot of buying pressure here comes down

pushes off and then we we fill it all here and we do reject

off of this order block we wick below. And this wick was

ultimately just trying its best to you know refill this large

move here. And as you can see we do feel around 50% of it. As

I was saying you know 50% is a good sort of level where it

likes to rebalance before continuing. But if we continue

we can see the next imbalance would be here from this low to

this high. Price doesn't quite come down to refill it all. We

do break structure. We have these little imbalances here.

We tap into the order block. We reject it. We tap in again.

Reject it. And then imbalance here. I'm sure you can get the

the um the concept of how powerful this is. Just from

looking at this you know 1 month of data. So Next

imbalance is here. We come down and order block is formed. We

respect it. We tap in. We break off. Tap in again. We leave

this imbalance from this high to this low. Price comes down

and again probably due to some news. Weak below the imbalance

tapping into an order block and then we see some heavy momentum

to the upside. And price comes back down. We have a bit of

imbalance that was left with these three candles.

We have a bit of imbalance here. Price wicked it. And we

had an order block that was formed. Because we broke

structure. More seen on a lower time frame. And then we have a

lot of sellers coming into the market. So the lowest candle to

the high. It's all imbalance as I'm sure you can see by now.

Price comes back up. We fall just short of the order block.

But again it can be refined down on a 15 minute time frame

where we can get involved in this trade. And I believe this

was a trade that I did take. Now with imbalances what we can

do is just use them as extra confluence when looking at a

trade. I don't never recommend you trade solely off

imbalances. Because it's simply not enough to have as a

compliments to trade in. So it's better to use it. So if

we're looking at this as you know our so hourly time frame

we we're looking at this as a push down a pullback and a new

low. So this would be our lower high. Where we can look to get

short from. Now what we can do is use the imbalance from here

to here as just more of a confluence. So if we was to you

know push down come back up and rebalance this move. But fall

short of this order block. As you can see we did before we

put in a new low. Then we can still enter on our lower time

frame breaks in structure because price is now efficient

even though we just fell short of the order block. Price is

efficient as we have rebalanced this move. So we can still you

know take advantage of this trade. Okay moving on. We put

in this new lower low. We have an imbalance from this wick. To

this wick. We pull back rebalance and then continue. We

have the exact same thing here. So from this wick to this wick.

Also from this wick down to here. You can see if we

rebalance it to the 50% before continuing. Well we we respect

the imbalance we push off and then ultimately we see some

heavy momentum to the upside but I'm sure you can get the

the rough idea of how a powerful imbalances are. Now

what I would want you to do is go onto your chart just like

I've done here. You know choose a pair. You can use any asset

on this um that's tradable. In the markets use anything you

want. Any type frame and a bit of homework. Just go through

it. Maybe you know a month data. Really dig deep into it

like I have. Plot on your imbalances and all the blocks

and just see how it works. Um I'm sure you'll get to get to

um start seeing the market differently. And how it it

respects these imbalances. Um but yeah I hope this was

helpful and let me know how you get on with your own um sort of

back testing.