IMBALANCES davidd.tech EVERY TRADER SHOULD KNOW THIS
A gap of liquidity (FVG) left during the
move down in price due to no buying pressure overlapping that part of the move in the previous or next candle Fair Value Gaps ( FVG) / Imbalances.
The key point in identifying these FVGs is
that the gap is only calculated by the impulse up or down candle, and the candles on either side of that move. Everything else does not contribute towards that gap.
These pockets of liquidity are important
and can act as strong entries as the market is drawn to liquidity, meaning that when price is planning to move down, it wants to clear the liquidity above it before hand, in turn making the liquidity pockets themselves a great entry before the move down, same with moving up.