---
title: 'This Will Change Your Trading! How to Trade Imbalance Correctly | Smart Money Training [+ Cheat Sheet]'
source: 'https://youtube.com/watch?v=CPIfzQAhGVE'
video_id: 'CPIfzQAhGVE'
date: 2026-07-15
duration_sec: 499
---

# This Will Change Your Trading! How to Trade Imbalance Correctly | Smart Money Training [+ Cheat Sheet]

> Source: [This Will Change Your Trading! How to Trade Imbalance Correctly | Smart Money Training (+ Cheat Sheet)](https://youtube.com/watch?v=CPIfzQAhGVE)

## Summary

This video explains the concept of imbalance in financial markets, a key tool used by large players like banks and hedge funds. It teaches how to identify imbalance zones on charts and use them to make better trading decisions, emphasizing that imbalance represents a temporary deviation that the market will likely correct.

### Key Points

- **Imbalance Definition** [00:01] — Imbalance occurs when there are significantly more buyers or sellers, leading to a fair value gap between three candles where the middle candle's body is not overlapped by the shadows of adjacent candles.
- **Market Forces** [01:31] — Imbalance can be created by any dominant side, not just large players. It shows where big money pushed the market, and recognizing these zones can help traders profit.
- **Market Balancing** [02:23] — Markets naturally strive to eliminate inefficiencies, so price tends to return to imbalance zones, making them potential entry points for trend continuation.
- **Visualizing Imbalance** [03:00] — Imbalance is visualized as a sequence of three candles where the middle candle's body is not overlapped by the shadows of the first and third candles. Exception: if the first candle is internal, imbalance is relative to the main candle.
- **Triggers for Imbalance** [03:25] — Effective imbalances often form after manipulation, breakout of key levels, trend change, prolonged flat, or important news. These triggers make imbalances more reliable.
- **Multiple Imbalances** [05:09] — Within one movement, several imbalances can form. It's crucial to wait for price reaction before entering, as the price may ignore the nearest imbalance and reverse from a lower one.
- **Price Reaction** [05:36] — If price reacts to an imbalance and moves up, it likely seeks liquidity above the nearest maximum. If it doesn't, it may seek liquidity below the nearest minimum.
- **Stop Loss Placement** [06:03] — When entering from an imbalance zone, place stop-loss outside the zone or behind the nearest market structure. Imbalances are typically used only once on the first price approach.
- **Trend Following** [06:45] — Imbalance helps avoid trading against the trend. If there's an upward imbalance on the hourly chart, look for buy signals after correction, not shorts.
- **Historical Context** [07:22] — Imbalance is not new; similar concepts exist in Price Action, Japanese candlesticks, and volume analysis. It's a time-tested approach.

### Conclusion

Imbalance is a powerful tool for understanding market sentiment and finding high-probability trade entries. By focusing on fresh imbalance zones and waiting for price confirmation, traders can improve their edge and avoid trading against the trend.

## Transcript

of the key topics of Smart Money - this is imbalance. If you have ever wondered how large players such as banks, hedge funds, and so on influence the market and how their influence is reflected in the chart, and most importantly, how you
definitely for you. You will not only better understand what balances are, but also figure out how to use them wisely. Because there are several very important principles, the misunderstanding of which can result in significant losses for you.
I do not consider imbalance to be some kind of a scale. But nevertheless, it is a tool understand the mood of the market, and in this video we will just analyze the system of how to do this. Therefore, if you want to add a powerful market analysis tool to your Arsenal
be sure to watch to the end, at the end you will find a useful cheat sheet with all the nuances on today's topic. Well, as always, in simple language and without fluff, let's go. So, what is imbalance? This is the moment
when there are significantly more buyers or sellers in the market than the I decided to buy you for billions of dollars, but there are simply not enough sellers for this amount. As a result, the imbalance of forces
in the market leads to the formation of a fair value gap or imbalance - this is the area of ​​the Central candle that is not covered by the high of the first candle and the low of the third candle. That is, between the first and third candles, a
space of sorts arises, this area shows where the demand in the market jumped over some of the levels, and the opposite country did not even have time to react. Such an imbalance in the market cannot necessarily be created
only by large players, banks or funds. The important idea here is that some country, buyers or sellers, began to dominate. Market forces are clearly not equal. Let's look at the chart after a trade. A large candle with a long
body appears. At the same time, the shadows of the previous and subsequent candles do not overlap. This is a classic example of an impulse within which an imbalance is formed. Or here is another example where the price falls sharply. Someone sold a large volume and there
were not enough buyers to contain this activity. In essence, an imbalance shows the mood of market participants. We see where big money pushed the market up, that is, actively intervened in the price movement, and if you learn to recognize this  These
zones, then you will be able to benefit from this accordingly. How do money, regardless of what financial market we are talking about now? Traders and investors in any market strive to eliminate these emerging
inefficiencies to eliminate any difference in fair value. A sharp rise in price, then a return to the mean, a sharp fall, then a return to the mean, again a sharp rise in price, then a return to the mean, and this happens
constantly. Imbalance is essentially a temporary deviation from the market will strive to balance it, which means the imbalance zone will be a potential point for a price return and a possible continuation of the
trend, given that before this there was clearly an initiative on the part of buyers. interesting for finding entry points into Long. As I already said, imbalance is usually visualized through a sequence of three candles where the
body of the Central candle is not overlapped by the shadows of neighboring ones. However, I would immediately point out one exception: if the first candle from the standard sequence is internal, that is, it is formed inside the previous candle, the imbalance should be
determined relative to the main candle. This clarification helps to more accurately highlight fair value zone Now let's deal with a very important topic When is it better to look for an imbalance? It is most effective to look for an imbalance after
certain market events, as I call them, triggers that create power between buyers and sellers. Firstly, after manipulation, manipulation is when large players deliberately
collect liquidity and mislead small traders. Liquidity is the lifeblood of the market. I talked about liquidity in detail in this video. the link. If anything is in the description, for example, an obvious support level is broken,
which the market moves in the opposite direction and an imbalance is formed. That is, it was manipulation, and the imbalance formed after collecting liquidity essentially gives a confirming signal about the actions of
large players. Accordingly, it makes sense to use this zone to search for probability of further upward price movement. Secondly, after a breakout of key support or resistance levels, if the breakout is accompanied by an impulse
imbalance between buyers and sellers can be traced. This increases the likelihood of successfully working out the balance formed by it. Thirdly, after  a change in trend, that is, after a change in the market structure, this is a similar situation to a level breakout,
only we see that an imbalance is formed during an obvious change in structure and a change in the mood of market participants. Good imbalances are also often formed after a prolonged flat if the market was in a sideways range and then a sharp
impulse took it beyond the range; a new structure suggests that the balance of power has changed. And of course, sharp price movements can cause important news; this often creates obvious balances for them, which can also be used
to open a position, that is, manipulation of both levels; a change in the trend of a flat or news; all these are the triggers that make imbalances more attractive for working out. It is important to remember that within one movement, for example, an
upward one, several imbalances can form. And we never know work out. The price can easily ignore the nearest imbalance and reverse only from a lower one, so it is very important not to rush and
observe the price reaction. The price reaction to an imbalance is a key indicator and the key to successful trading, so do not rush if the price reacts to  The gap stops and starts moving up, it most likely seeks to reach
liquidity located above the nearest maximum. If the price does not will most likely seek liquidity below the nearest minimum. This, by the way, immediately comes to the question of determining the nearest movement targets. First, we analyze the
nearest waves. If we opened a Long position, these will be our nearest targets, and then we evaluate the waves of higher timeframes. These will be longer- can be closed, for example, at the nearest levels, and the rest can be held to
achieve longer-term goals. If you enter a trade from the imbalance zone, it makes sense to place a stop-loss outside this zone or behind the nearest market is high enough after the imbalance closes, this area is
is, all imbalances are used, as a rule, only once during the first price approach. This helps to avoid unnecessary risks and focus only on fresh, relevant zones. I don’t want you to think that by starting to track their
balances, you will immediately become a profitable trader. No, but you definitely  You will start find situations in which the advantage will be on your side and you will be able to profit from this more often, or at least filter out unnecessary transactions. It
often happens that there are counter-trades, for example, there is no imbalance. This means that, in essence, we are following the trend. That is, at a minimum, what imbalance helps you do is not trade against the trend. If you see, for example, an upward imbalance on the hourly chart,
then how? What can be a short if at the same time there is also an ascending structure, plus there is an interesting level or a cascade of levels ahead, then the price, like a magnet, will most likely be pulled there, most likely, the upward movement will
signals to buy after a correction. Well, if you still want to work out a sale, then first wait for either manipulation at key levels above and then the formation of an imbalance downwards, or a breakdown of the ascending structure and the formation of an
imbalance downwards. Only after this does it make sense to look closely at sales. It is important to understand that imbalance is not new. But a well-forgotten old. Similar strategies exist in Price Action theory and in Japanese switches, methods of working with volume,
for example, Vol through zones of low activity between levels.  They show where there was a clear imbalance between buy and sell orders. So, this is simply a time-tested approaches to make it easier for you to remember all the points we
covered today. Be sure to download the cheat sheet from the link in the description. Look for experience, and I'm sure your trading results will definitely improve. I posted everything in the link under this video. I really hope this video
sure to like it and leave a comment because that's the new videos for you. Thank you for watching this video to the end. By the way, you'll find even more useful trading cheat sheets on my Telegram channel. Let's stay together. I wish you profit,
trading cheat sheets on my Telegram channel. Let's stay together. I wish you profit, and I'll see you in the next videos.