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

[00:01] 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

[00:13] 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.

[00:26] 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

[00:40] 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

[00:52] 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

[01:05] 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

[01:18] 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

[01:31] 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

[01:45] 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

[01:58] 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

[02:10] 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

[02:23] 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

[02:35] 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

[02:48] 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

[03:00] 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

[03:13] 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

[03:25] certain market events, as I call them, triggers that create power between buyers and sellers. Firstly, after manipulation, manipulation is when large players deliberately

[03:37] 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,

[03:51] 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

[04:03] 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

[04:17] 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,

[04:30] 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

[04:45] 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

[04:57] 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

[05:09] 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

[05:22] 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

[05:36] 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

[05:49] 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

[06:03] 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

[06:18] 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

[06:31] 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

[06:45] 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,

[06:57] 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

[07:09] 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

[07:22] 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,

[07:35] 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

[07:49] 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

[08:02] 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,

[08:17] trading cheat sheets on my Telegram channel. Let's stay together. I wish you profit, and I'll see you in the next videos.