Volume Imbalance: Empty Space Between Candle Bodies

Unlike traditional FVG (measured from wick 1 to wick 3), Volume Imbalance (VI) is a gap that forms when **the real bodies of two adjacent candles do not intersect**, even though their wicks may have crossed each other.

1. How to Determine Accurate Volume Imbalance

Volume Imbalance reflects the actual physical distance between the closing and opening prices:

• In an uptrend: The gap is between the prices Close of the previous bullish candle and the price Open of the following bullish candle.
• In a downtrend: The gap is between the prices Close of the previous bearish candle and the price Open of the following bearish candle.
• Although the wicks of these two candles may have crossed, the lack of crossover of the candle body shows that at that price, matched orders had extremely thin volume or were completely vacant due to the GAP price hopping algorithm.

2. Technical Meaning of Volume Imbalance

The IPDA algorithm considers Volume Imbalance as an ineffective trading zone in terms of actual matched volume (candle body represents the main matched volume). Therefore, the price tends to return to test and **fill this candle body gap** (future candle bodies will close to fill that gap) to balance liquidity before continuing the trend.

3. How to Combine Volume Imbalance in Trading

Volume Imbalance acts as an extremely sensitive resistance/support level. You can use VIs to:

• Entry fine-tuning points: Place a Limit order at the border of Volume Imbalance when the price retests.
• Take profit target area (TP): Place TP in unfilled zone VI on the opposite time frame.
• Early reversal warning: If the future candle body closes decisively and completely surpasses the Volume Imbalance zone, it shows that the VI resistance has failed and the trend will continue to run strongly in the direction of the breakout.