Imbalance/ FVG

Imbalances and Fair Value Gaps


You will learn What is an Imbalance/FVG and How to Use the FVG Settings in the SMC Indicator. Trade Example Trade Example 2 Imbalance FAQ

What is an Imbalance / FVG

Imbalance = Fair Value Gap (FVG)

An imbalance of orders is when a market exchange receives too many of one kind of order—buy, sell, limit—and not enough of the order's counterpoint. For sellers to complete their trades, there must be buyers and vice versa; when the equation is slanted too heavily in one direction, it creates an imbalance.

Like any other concept in this indicator, we use them in combination with other Smart money concepts to increase the probability of our trades.

Trade Example 1

In this example below, we see an example of the creation of a demand zone with up following imbalance. Price comes back but never really touch our demand zone. What do we see?

The FVG/ Imbalance gets filled for 50% → gives us confirmation with a new demand zone → price takes off to next high.

When there is imbalance close before your POI, it will mostly fill the imbalance and take off.

Trade Example 2

If there is imbalance close to your POI, take it with your entry or stop loss. Keep in mind, price can also go a little further to clear the imbalance and then move.

Fair Value Gap Settings

Show Fair Value Gap (FVG): Option to show/hide the FVG

Remove Mitigated: Option to either keep or remove the mitigated FVG. Two options [Remove] will delete the imbalance boxes after it has been mitigated. [Stop] will stop drawing the box at the bar of mitigation

Extend the FVG Box: Option to set how far out you would like to extend the Imbalance Box. Set the number to 500+ for them to be fully extended to the right

Display Limit: Set a maximum display limit


  • Will my supply or demand zone increase in strength if it creates imbalance after? Supply and demand zones with an up following imbalance are stronger than supply and demand zones without imbalance.

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