#10 Imbalance

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What Is Imbalance?​

Imbalance happens when one side of the market is much stronger than the other.

In simple words:

• More aggressive buyers than sellers
  or
• More aggressive sellers than buyers

When this happens, price moves.

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How Imbalance Is Created​

Imbalance is created by market orders, not limit orders.

• Strong buy imbalance → buyers hit the ask aggressively
• Strong sell imbalance → sellers hit the bid aggressively

If the opposite side cannot absorb these orders:

• Price is forced to move

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Imbalance vs Absorption​

• Imbalance → price moves
• Absorption → price holds

Think of it this way:

• Absorption = resistance
• Imbalance = pressure breaking through

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What Imbalance Looks Like​

Common signs:

• Fast price movement
• Thin volume at each price
• Few trades before price moves to the next level

Example:

• Buyers lift multiple ask levels
• Little trading at each level
• Price moves up quickly

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Why Imbalance Matters​

Imbalance explains:

• Breakouts
• Strong trends
• Fast directional moves

It shows who is in control right now.

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Beginner Tip​

Do not chase imbalance blindly.

First understand:

• Market depth
• Liquidity
• Recent absorption or acceptance

Imbalance without context can fail.

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#9 Absorption (Basic Concept)

#11 Absorption and Sweeps On the DOM!