What is an Order Imbalance?
Imbalance
Forex Trading Glossary
Quick Answer: An order imbalance occurs when aggressive buyers or sellers overwhelm available liquidity, leaving inefficient price gaps that often draw a retest.
What is an Order Imbalance?
An imbalance occurs when aggressive buyers or sellers overwhelm the available liquidity at a price level. The resulting vacuum leaves single-print candles or price gaps that often attract a retest.
Spotting Imbalances
- Wide candles: Long-bodied candles with little overlap hint at inefficient pricing.
- Volume spikes: Surge volume shows institutions executing large orders.
- Market profile clues: Single prints or thin areas on volume profiles mark imbalance zones.
Trade the Reaction, Not the First Touch
Price often tags an imbalance and keeps running. Wait for rejection or structure change before fading the move.
Using Imbalances in Strategy
- Mark imbalance zones to anticipate where price may revert or accelerate.
- Combine with order blocks or liquidity grabs to filter which zones matter.
- Monitor liquidity data—DOM, volume profile, or footprint charts—to track how the gap is being filled.
- Use imbalances to set realistic profit targets after breakout trades.
Related Terms
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