What Is a Volume Imbalance?
Volume imbalances can reveal aggressive participation.
On a footprint chart, traders often look for a substantial difference between buying and selling volume at comparable price levels.
A series of buying imbalances may indicate aggressive buyers pushing through the market. A series of selling imbalances may show aggressive sellers pressing lower.
But here's where many beginners make a mistake: they enter simply because they see several imbalances.
Ask yourself:
Where did the imbalances appear?
Is price breaking out or reaching an established extreme?
Did the move continue after the imbalance?
Where would the trade idea be invalidated?
An imbalance matters more when its location and the market's response support a clear hypothesis.
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