Imbalance/Fair Value Gap (FVG)

Imbalance (fvg, inefficiency) - impulse price movement, which shows disequilibrium between buyers and sellers in a certain range due to lack of liquidity. The algorithms tend to overlap the imbalance and trade the range in which it was formed, it is a magnet for price.

The empty space between the shadows of the first and third candle is called imbalance.

Imbalance will not be used as an independent instrument for entering a position. Quality trades can be opened in combining with an orderblock (OB), breaker block (BB), or mitigation block (MB).

Trigger zones for price reverse will be a 50% of imbalance fill or full fill.

Use the Fibonacci grid to determine the 0.5 imbalance.

Full fill is a fill of the emptiness all the way down.

You can not enter on the basis of imbalance only, you need to consider evety factor to find an entry point in the position.

The most common reaction from a 50% imbalance can be seen in combination with a breaker or a mitigation block.

The use of imbalance allows you to increase the accuracy of the entry, as well as the ratio of risk/profit.

Higher timeframes will always take priority over lower ones (1M - 1W - 1D - 4H - 1H - 30m - 15m - 5m).

You will not be able to trade successfully against large market participants, you need to understand their goals and follow them. Trading against smart capital makes no sense. Retail traders are just a liquidity needed in any market to fill orders. The main task of a smart money trader is to identify the traces of smart money on the chart that they leave in their orders and bids, and to follow the big market participants.

What does MM do?

They lead traders into misleading, forcing them to open positions in one direction or the other. Traders at this time often open unjustified positions, their stops are triggered by liquidity. As soon as big capital has enough of its position, they start actively marking up or marking down the asset.

Creating of panic and false excitement to induce traders to become reckless and think irrationally.

This is often done in the following ways

• Quick moves

• Candles with long shadows

• Press releases

• Consolidations