📌 What is a price imbalance? #

When price moves impulsively, it sometimes leaves behind a “void” — an area where no transactions took place because price moved too quickly for buyers and sellers to meet.

These voids are called:

• FVG (Fair Value Gap)
• VI (Volume Imbalance)

👉 They represent a lack of liquidity in the order book, often caused by Smart Money activity (institutions). As such, they become key zones where price is likely to react.

🟧 FVG – Fair Value Gap #

A Fair Value Gap (FVG) forms when an impulsive move creates a gap between the wick of the first candle and the wick of the third.

Example (bullish case):

1. Candle 1: upper wick

2. Candle 2: strong bullish impulse

3. Candle 3: lower wick

👉 The FVG is the area between the high of candle 1’s wick and the low of candle 3’s wick.

📌 In any impulse (bullish or bearish), there are always opposite orders (sellers in a bullish move, buyers in a bearish move).

But if price moves too fast, these orders can’t be executed in time.

👉 The FVG marks an incomplete zone — price often returns to it to complete the execution of those pending orders, before resuming its initial direction.

🎯 This is a typical Smart Money behavior:

They create imbalance, then return to fill the zone, close inverse orders, and reaccumulate liquidity at a better price.

🟦 VI – Volume Imbalance #

A Volume Imbalance (VI) occurs when there’s a clean gap between the bodies of two consecutive candles, with no transactions in that price range.

Typically:

• The open of one candle is above the close of the previous one (or vice versa)
• This creates a gap between the bodies, with no real market activity in that space

👉 The VI is the zone between the top of candle 2’s body and the bottom of candle 3’s body.

🎯 This imbalance means the market skipped an entire price area without facing any opposite liquidity.

👉 It reflects aggressive institutional pressure, leaving behind a pure void.

📌 And just like nature, the market hates emptiness:

It almost always returns to fill these gaps — often very quickly.

🧲 Why are these zones important? #

Because they’re footprints left by Smart Money.

When institutions create strong movements, they often leave behind an imbalance:

• To accumulate or distribute quickly
• To attract liquidity in one direction
• To trap impatient retail traders

But these moves aren’t always “clean” — they leave untraded zones where orders weren’t executed.

👉 That’s why Smart Money often returns to those gaps, to:

• Finalize their previous orders
• Rebalance their positions
• Relaunch a clean move with fresh liquidity

🎯 Why does price often return to a FVG or VI? #

Let’s take a simple example:

1. An institution buys aggressively → bullish impulse
2. Price moves so fast that it leaves an FVG or VI
3. Some buy orders didn’t get filled → price moved too quickly
4. The institution brings price back down to fill the imbalance, execute leftover orders, and reaccumulate at a better price

💬 It’s like they’re saying:

“We started the move… now we come back to finish the job.”

📈 The Importance of the FVG/VI Midline (the 50%) #

The midpoint of an FVG or VI is often a key reaction zone.

Why?

Because if an institution left a gap, they likely:

• Executed part of their orders near the top or bottom of the imbalance
• Then return to the center to rebalance

👉 At the exact center of the gap, they can:

• Close 50% of losing positions
• Close 50% of profitable positions

→ That brings them to the perfect break-even point.

But it’s also a great opportunity to:

• Reaccumulate or redistribute at an optimal price

💡 As a result, we very often see rejections or consolidations around the midpoint of a gap — It’s a major institutional point of interest.

🧠 Summary #