What Is an Imbalance in Trading?
And how my free TradingView indicator helps you spot them faster
In trading, imbalances (also known as market inefficiencies or fair value gaps) represent areas on the chart where price moved too quickly—leaving behind zones with little to no trading activity. These areas often act as magnets for price to revisit, making them valuable to traders who want cleaner entries or exits.
My free TradingView script, the Imbalance Finder, is designed to automatically highlight these zones using a simple but powerful 3-candle logic.
💡 How It Works
The script analyzes three consecutive candles. When there's a gap between the wicks of the first and third candle, that gap is considered a potential imbalance.
When an imbalance is found:
- A box is drawn to mark the zone.
- As price begins to re-enter the zone, the box border switches from solid to dashed—giving you a visual cue that the imbalance is being filled.
It's a clean, visual way to track where price may return, especially if you're building confluence for setups or just want more structure in your technical analysis.
⚙️ Customization Options
The latest version of the script (written in Pine Script v5) includes:
- Custom colors for both candles and imbalance boxes
- Box limit toggle so you can control how many imbalances appear on your screen
- Lightweight performance, so it won’t slow your chart down
📈 Try It for Free
The Imbalance Finder is currently available as a free public indicator on TradingView. You can add it to your chart in seconds by visiting the script page:
👉 View the Indicator on TradingView
💬 What's Next?
I’m currently working on a Pro version of the indicator with features like:
- Multi-timeframe imbalance tracking
- Real-time alerts
- Grouping overlapping imbalances
- Full/partial fill metrics
If you’re interested in getting early access or want to give feedback on what to build next, feel free to reach out or follow me on TradingView.
Thanks for checking it out—and happy trading.
– PatrickWS
