Imbalance

Price imbalance is a very important concept to understand as it is incredibly powerful. Imbalances occur when either buyers or sellers take control over a particular piece of price action, which essentially leaves gaps in the market that price will come back to in the future, so we can rebalance price. 

When we look at a bearish imbalance, it means sellers have been most dominant in moving price down, and the buyers haven’t had a chance to get involved. The same is true for when we see a bullish imbalance. Buyers take control and the sellers don’t get involved. Imbalance occurs on every single timeframe, and once you go to your charts to see how this works, you will start to view the markets differently and realise how price refills these imbalances. 

Price imbalance is when we either get large momentous candles or where wicks are not meeting. So the easiest way for me to show you is with this example below where we get three bullish/bearish candles in a row. Balanced, or efficient price action is where the wicks are meting. Imbalanced price action is when the wicks are not meeting. So the area in the middle is where the price imbalance would be.