Imbalance And Inefficiency Beyond The Basic Gap
A 1-minute lesson from the MarketPro academy, one of 22 in smart money concepts.
Beyond the basic three-candle fair value gap, smart money concepts use the broader idea of "imbalance" to describe any stretch of price where one side of the market moved so aggressively that trading was thin or one-sided, leaving inefficiency behind. A single unfilled gap is the simplest example, but imbalance can also describe a run of several candles with minimal overlapping wicks, or a fast impulsive leg with very little two-way trading.
Beyond the basic three-candle fair value gap, smart money concepts use the broader idea of "imbalance" to describe any stretch of price where one side of the market moved so aggressively that trading was thin or one-sided, leaving inefficiency behind.
Imbalance As A Spectrum
A single unfilled gap is the simplest example, but imbalance can also describe a run of several candles with minimal overlapping wicks, or a fast impulsive leg with very little two-way trading. The common thread is that price moved further, faster, than typical order flow would suggest, which some traders interpret as a sign that one side was in control with little resistance.
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Lesson 13 of 22 in Smart money concepts
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