Imbalance
The Imbalance chart is similar to the Footprint chart: it also uses trading volumes to display Imbalance situations, i.e. the lack of balance between buyers' and sellers' volumes.
Let's see how the trader can manage this phenomenon that is often perceived as a good new trading opportunity, so here's how it is calculated.
Preview | Meaning |
|---|---|
 | The algorithm shows the volume traded by bid and ask at certain price levels for each bar on the chart, compares bid and ask diagonally (in both directions) and highlights in light blue a significant excess of one over the other. The bar in the image alongside shows how sellers entered the market unbalanced compared to buyers and pushed the price down. |
Preview | Meaning |
|---|---|
 | In the image on the side, the algorithm marks the first box in light blue because the current setting is: volumes with a major difference > 200% comparing Bid and Ask in two different adjacent price levels. The calculation is performed in both directions, i.e. volume 2 with volume 25 (2/25=0.4*100=40%) and volume 25 with volume 2 (1250%). Since in the box shown, volume 25 has a result greater than 200% (our minimum activation level with the current settings), it is highlighted in light blue. Here is a first Imbalance! |
Preview | Meaning |
|---|---|
 | The same procedure was performed for box 281 and box 1. In fact 281/1 100 = (281%) while 1/281100 = (0.3%). And since we have set to highlight imbalances greater than 200%, box 281 is colored blue. This is the second Imbalance, which however is not a support/resistance level as we have set by default to consider support/resistance only in the case of 3 adjacent Imbalances in 1 single bar. |
In the image above you can see how after 3 Imbalances in the same bar the light blue Support line 1 has been drawn. In fact the price takes the path of the climb. Then, in the bar relative to the point 2 another 3 Imbalances have occurred thus drawing a Resistance.
Settings
Imbalance Ratio: the percentage you want to intercept by comparing the Bid and Ask volumes in two different adjacent price levels;
Ticks Grouping: the number of ticks that make up a price level in the candles;
Show Support/Resistence: activate to display support and resistance zones;
S/R Imbalance Count*: how many adjacent Imbalances must there be before drawing a support or resistance;
S/R Length: allows you to choose how to display the support/resistance line in one of three modes:
Chart End: the S/R line will be drawn up to the right edge of the chart, and will always be present even if new S/R lines are generated;
Next S/R: this choice allows you to display the S/R line only until a new S/R line is generated;
Fixed number of Bars: each S/R line has the same length, which can be changed by setting the value in the “S/R Length in Bars” field;
Sell Color*: the color of the column with the volumes traded on Bid;
Buy Color*: the color of the column with the volumes traded on Ask;
Imbalance Color: color to highlight Imbalance conditions and draw support and resistance zones;