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Market balance and imbalance

Trader's Glossary · Profile and auction

Market balance and imbalance

Definition. The two basic states of the market in auction theory. Balance is trading within a range, with both sides active. Imbalance is a directional move in which the market searches for new value.

How it works

The market cycles from balance to imbalance and back. In balance, price rotates around the value area. In imbalance, one side takes the initiative and the profile elongates.

Example

After several days of trading in the same range, the market breaks out of it after a data release and builds value higher over the following days.

What to watch out for

Don't confuse this with an “imbalance” in the footprint, which refers to individual price levels. Assessing the state of the market requires looking at several sessions.

This is the TPO – Market Profile in the Hetman Terminal (Chess Clock). Screenshot from the Hetman Index (IHA) – a training instrument, simulated data.
This is the TPO – Market Profile in the Hetman Terminal (Chess Clock). Screenshot from the Hetman Index (IHA) – a training instrument, simulated data. See all the Hetman Terminal tools →

♛ The Hetman Terminal is part of Club: live for Dow Jones from the Bishop plan, 6 markets (Dow Jones, S&P 500, Nasdaq, gold, crude oil, Bitcoin) and automatic detection of order flow events from the Rook plan. A session on the ♛ Hetman Index (training, simulated data) in the full panel comes with the Knight plan and above. Compare the plans →

See also

Composite profile, Day types, Acceptance and rejection.

More in Hetman Capital Club

You'll find the full explanation with graphics, examples and exercises in the 📖 Order flow encyclopedia space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).

Educational content, not investment advice.