Speaker A
What is going on guys and welcome to advanced imbalanced concepts. Okay, so this is going to be covering other imbalances that we can see within the market and then also touching a little bit up on uh for value gaps just one
Explore advanced market imbalances including new day, week, and candle opening gaps, and how to use them for trading advantage.
Ask about this video. Answers come from its transcript only — with the timestamp, so you can check them.
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Key Takeaways
- New day and new week opening gaps are strong liquidity draws that price often seeks to fill.
- New candle opening gaps are rare and generally not useful for trading due to continuous market activity.
- Imbalances like fair value gaps and BPRs provide critical insights into price action and potential trade setups.
- Using these gaps as entry points or targets can enhance trading strategy effectiveness.
- Understanding the time gaps between market closes and opens is key to leveraging these imbalances.
What the video covers
- The video covers advanced imbalance concepts beyond fair value gaps, focusing on new day, new week, and new candle opening gaps.
- New day opening gaps occur between the close of one day and the open of the next, representing imbalanced price areas that price often seeks to fill.
- New week opening gaps happen between the close of Friday and the open of Sunday, similarly acting as liquidity draws that price tends to revisit.
- New candle opening gaps exist on any timeframe but are generally less useful for trading due to continuous market activity.
- The presenter explains how these gaps can be used as entry points or targets in trading strategies, emphasizing their role as liquidity magnets.
- Fair value gaps and BPRs (Breakout Pullbacks Reversals) are also mentioned as important imbalance concepts.
- Examples on various timeframes (daily, 4-hour, hourly, 5-minute) demonstrate how gaps form and get filled.
- The video stresses that while these gaps are not required to be filled, they have a high probability of being targeted by price before continuing trends.
- The presenter shares personal trading examples and explains the rationale behind using these imbalances in real market conditions.
- The overall goal is to provide a comprehensive understanding of market imbalances to improve trading decisions.
Chapters
- 00:00Introduction to Advanced Imbalance Concepts
- 01:37Understanding New Day Opening Gaps
- 02:51Benefits and Uses of New Day Opening Gaps
- 04:01New Week Opening Gaps Explained
- 05:11New Candle Opening Gaps and Their Limitations
- 07:23Chart Examples of New Day Opening Gaps
- 08:54Chart Examples of New Week Opening Gaps
- 11:37Trading Examples and Practical Applications
- 14:06Summary and Final Thoughts on Imbalance Trading
Full Transcript — Download SRT & Markdown
Speaker A
more time and then tomorrow we're going to be uh covering inverse for value gaps. Um but today I want to talk about the different there's other imbalances that we can see within the market. Um so with that being said, let's jump
Speaker A
straight into it. So what are the other imbalances that are in the market besides just for value gaps? There are new day oh jeez new day opening gaps, new week opening gaps, new candle opening gaps.
Speaker A
And then there are BPRs. And we'll talk about fair value gaps a little bit more at the end of this. So, first thing, this is going to be super super easy for you guys to understand.
Speaker A
What is a new day opening gap? Well, it's pretty simple. It's when we close the current day and then we open into the new day. There's a small hour where the market is not going to be trading during that time. And in turn if we
Speaker A
let's say close the previous day right here and then we open the day the new day right here after that hour then this would be considered a new day opening gap. Okay you guys will see this we'll show examples of this on the chart and
Speaker A
all that it is is a area of imbalance price that price is actively going to want to seek out to balance out before continuing in the direction that it wants to go. Now, how can you guys use this to your advantage?
Speaker A
To be honest, it's very rare that we are able to be able to take trades towards new day opening gaps or towards new week opening gaps. So, you're probably saying, well, why are you even teaching teaching us about this? Because it is my
Speaker A
duty to you guys as your mentor to be able to um pretty much teach you guys everything that I know about the markets um within this series. That's my goal with this is to teach you guys everything. And on occasion, there are
Speaker A
very, very good trades that we can do that we can take to target these new day opening gaps and new week opening gaps and potentially new candle opening gaps.
Speaker A
Okay, so same thing with so that's new day opening gaps. It's very very simple.
Speaker A
Okay, let's say the previous day closed right here. An hour goes by, the new day opens up here. There's a gap between the two candlesticks, close and open. Price is actively going to want to seek out to fill the new day the new day opening gap
Speaker A
and then continue in the direction that it wants to go. So, how is this beneficial for us? One, we know that we can actually treat these new day opening gaps as very strong draws on liquidity.
Speaker A
Now, you're probably saying, "I thought imbalances aren't draws on liquidity." Yes, fair value gaps are not required to get filled. That's what we talked about yesterday. They are by all means not required to get filled and new day
Speaker A
opening gaps and new week opening gaps are not required to get filled either. However, price more often than not has a very high probability of actively wanting to seek out these gaps and these imbalanced price ranges specifically new
Speaker A
day and new week opening gaps to balance it out and then continue price in its direction. So you can use this as one of two things. Either as an entry point by understanding, hey, we have imbalanced price action right here and we are going
Speaker A
to want to target the new day opening gap first before continuing the trend higher and look for an entry there. Or if we are well above a new day opening gap, you can say, hey, look, we have a
Speaker A
new day opening gap right here. This is probably where price is going to want to draw towards and we can use it as a target. Same thing with new week opening gaps. As you guys know, the market closes on Friday and then reopens in
Speaker A
like Sunday the afternoon, depending on what time zone you're in. So, typically, I mean, we we'll show it on the chart, but boom, let's say this was Friday's close right here. And then boom, Sunday open is up here. It's the same exact
Speaker A
thing, but just happening on over a week on the weekly candlesticks. Okay, so again, if there's a gap between Friday's close and Sunday's open, what will price typically do? it will want to actively seek out that weekly imbalance price
Speaker A
action and then continue in the direction that it wants to go. Again, you can use this through to your advantage by either taking trades towards the new week opening gap as a target or taking trades within the new
Speaker A
week opening gap as an entry. Okay, the next thing is new candle opening gaps.
Speaker A
And then we're going to show all of these on the chart. So, new candle opening gaps are literally the exact same thing as new day, new week opening gaps, but just on any time frame that you're trading on. So, just like how on
Speaker A
the daily time frame, we can have gaps between the days and just like how on the weekly time frame we can have gaps between the weeks, we can also have gaps between candlestick closures. So, let's say that we are on the 4hour time frame,
Speaker A
for example, and the 4hour candlestick closes right here and then we have the next 4hour candle opens up here. it jumps up. This right here is imbalanced price action. What is price actively going to want to do? It's going to want
Speaker A
to balance it out and then continue in the direction that it wants to go. This one I'm going to be I'm going to keep it in absolute buck with you guys, is pretty freaking useless. Um, but I figured I would put it in there because
Speaker A
it does happen and it is an imbalance in price action. You will very very very very very very very very very like 0.00001% 0000001% of the time be looking to take a trade off of a new candle opening gap um as an
Speaker A
entry or a new candle opening gap as a target. And the reason behind this is because we need to think new day opening gaps. Why are we able to use this as a target or as an entry? Because there's
Speaker A
an hour worth of price action or there's an hour that we are pretty much skipping from market close to the new day open.
Speaker A
So there's an hour that price can shift and that price can move. For new week opening gaps, there's two whole days that price is able to shift and that price is able to move. So with that understanding, it's like okay, there's
Speaker A
there's there's time in between these candlesticks closing close and opens. However, for new candle opening gaps, it's like there's it's it's literally from the candlestick close to the next candlestick open. And if the market's open, you know, it's pretty rare for a
Speaker A
candlestick to close and then the next candlestick while the market is open to just jump up in price while the market is open fluid and orders are being filled, right? Versus the new day and new week, there's actual time in between
Speaker A
the two for price to actually move up or move down in price to cause those gaps to get formed. So, with that being said, let's go ahead and look on the chart to show examples of this. This happens very
Speaker A
very frequently. Okay, so we can I mean this is a good example right here. What do we see from this daily candle? Where do we close? We close down here and then boom, the new daily candle opens up
Speaker A
here. And actually, what do we see from this daily candle? We come through and we fill this gap completely. So if we go here on the 4hour time frame, we can see that the daily candle closed right here
Speaker A
at 1400 and then the new day candle opened up here at 1,800. And we can even scale down to the hourly time frame and show the exact moment. So the hour that is skipped is 1,700. We can see that
Speaker A
this is the 1600 candle right here. This was the close. This is the next candle's open. And then boom, immediately right when the new day opens, what do we come down and do? We come down and we fill
Speaker A
that gap. We can even scale down onto the 5minut time frame to show it a little bit better. We can see that boom, this is when the previous day closed.
Speaker A
This is when the new day opened. What do we immediately do? We come down and we fill this gap. Now, again, this is during Asian session. So, I'm really never looking for these trades to be taken. That's kind of why I said that
Speaker A
this is kind of hit or miss on when we're able to use it. However, new week opening gaps, we actually have more opportunity to be able to take advantage of that because typically the new week opening gaps are going to be a little
Speaker A
bit larger and a little bit more drastic um and potentially creating a a bit more of a range um for us to be able to trade into. And maybe on Sun on Sunday open, we're trading pretty stagnant because
Speaker A
again, it's Sunday. No new money from the US market has came into the market yet to be able to move it. So, it gives us an opportunity on Monday to either take a trade towards the new week opening gap or as an entry out of the
Speaker A
new week opening gap. So, let's show an example right here. We can see that this is a very good example. We have boom, this was the weekly candlestick closure right here um from the week of Monday, October 20th. And
Speaker A
then we can see that this week opened all the way up here. So, we have a huge weekly gap within here. And then if we go onto the daily time frame, what do we slowly but surely do? We can see that
Speaker A
boom, the Friday, this was Friday's close. This is Sunday's open. And then from there, we slowly but surely come in to fill this gap. So in this this scenario, what would we have been looking for?
Speaker A
We probably would have been looking at it like this. Boom. This was Sunday's close. This was Mon or sorry, this was Friday's close. This was Sunday's open.
Speaker A
We trade up and then boom. What is this? This is around Wednesday. We get a liquidity sweep and then we go down to fill in this gap down here as a target. Okay, let's show one more example of a new week opening gap.
Speaker A
Again, the odds of you guys using this is uh I mean, I don't want to say it's low, but very rarely. I will occasionally take trades um off of this.
Speaker A
So boom, this is a good example right here. We have Friday's close and then we have Sunday's open and we can see that literally right when the market opens, boom, market opens, we immediately trade down, we fill this gap and then we
Speaker A
continue higher. So in this case, this would be an entry point. But again, the odds of us trading on a Sunday, it's just not very likely. Um but again when we do have the off chance that these gaps don't get filled immediately cuz
Speaker A
like I said price will very rapidly want to actively seek out these imbalances and fill them as soon as possible these gaps in the market. Um when we don't when we don't fill them and coming into Monday open then it's a very very good
Speaker A
target. So that's new day new week opening gaps and then let's show an example of a new candle opening gap. Now again, like I said, these are pretty difficult to spot. Um, but we can try and find an example right here. So, this
Speaker A
is a good example. We can see that boom, this candle closed right here. This is on the 1 minute chart. And then boom, this new candle opened right here. So, this is an imbalance. Once this candlestick closes, what do we
Speaker A
immediately come up and do? We come up, fill it, and then continue a little bit lower. Okay, let's show another example.
Speaker A
Um, this is a good example right here. We have the close and then we have the open. Okay, so there's a small gap within here. Once this candlestick closes, what do we immediately come up and do? We balance out price action.
Speaker A
Again, the odds of you guys using this. As you can see, these are very microscopic, very, very small moves. Um, it's to keep it a buck, it's [ __ ] useless. Okay, so new candle opening gaps. There you go. Now you know it. You
Speaker A
can show your grandparents and say, "Hey, I know what I'm talking about." And you're never going to use it again.
Speaker A
Happy birthday. Okay. Next thing that we're going to be looking at is BPRs. Okay. We're going to be looking at BPR.
Speaker A
So, what is a BPR? A BPR is essentially two sets of or pretty much imbalanced price range that we get a swift move down or a swift move up through and then followed by a swift move back up or down
Speaker A
through. So, we actually had a couple good examples of this over the past couple days. I believe my trade yesterday, it was taken off of a BPR.
Speaker A
So, matter of fact, let's just go to that. Um, let's just go to that and I can show you guys the example trade that I took. It was on Wednesday and it was a short position, I believe. Right.
Speaker A
Did I take it on? Let's see. Wednesday. It was a long on the S&P 500. When did I take it? At 9:36. Oh, wait, no, no, no, no, no. It was on Tuesday that I took the trade. It
Speaker A
was on NASDAQ. Short 10:41. There we go. NASDAQ. It was a short on Tuesday at 10:41. Let's try and find this thing.
Speaker A
Tuesday. Yes, this is exactly look what I was looking for. Okay, cool. So when we have So this is kind of what I was talking about and I guess this kind of leads into what the extra stuff that I was
Speaker A
talking about with fair value gaps. When we have all of these fair value gaps stocked up stacked up or even better if we can look at just this price action.
Speaker A
What do what do we see? What do we see that price did here? This was a very very rapid very very swift move up.
Speaker A
Okay. So what do we know about imbalance price action? What do we know about these imbalance ranges? We know that when they are create created it means that there's okay in the bullish sense there's a lack of sell orders right so
Speaker A
or there's just a lack of orders. So we can see boom price what what is price able to do? Boom rip right through it with the buy orders that were filled down here. Okay. Typically, when we have a big swift move
Speaker A
straight up or straight down, when price re-enters that range, it will be able to one completely fill that range right back up, but also move just as swiftly down through it as it moved up. So, my trade on Tuesday was actually
Speaker A
taken off of this. It was identifying that hey we have a very very illlquid price range right here. If price is able to start giving me some bearish confirmation which it did up here then I am going to look to take a trade all the
Speaker A
way down to the bottom of this price action. Why? Because I know that this is a imbalanced price range. And two, I know that once price enters into this imbalance price r price range just as how quickly price was able to move up
Speaker A
through it, price is going to be able to move down through it very very smoothly.
Speaker A
And then once it gets filled, price will probably continue in the same direction that it was going. There you go. So this trade was taken So this was taken on the creation of a BPR. So you're probably saying what does
Speaker A
a B what is a BPR? A BPR is essentially a illquid price range. Okay, that we can identify a swift move up and then also a swift move down. So, I don't want to get you guys like super
Speaker A
confused or whatever, like cause you guys to panic and freak out and think, "Oh my goodness, like I need to understand this." Because again, it's very most of these concepts, I just want you guys to understand it and have it in
Speaker A
your back pocket because if or when I take a trade like I did on Tuesday towards this, I want you guys to be able to understand it. And I also again like I'm teaching you guys all of these
Speaker A
advanced concepts because I feel feel like you guys need them, okay? Because there is off chances that these things happen. Okay? So a BPR is when we have a swift move up through imbalanced price action and then we have a swift move
Speaker A
down through imbalanced price action and then from there we can just identify this entire range as imbalanced price.
Speaker A
Okay. So how can we use this to our advantage? Well, there's one thing. When we see the swift move up, we can use it as a target knowing that, hey, once we enter back into this range, we are going
Speaker A
to move very swiftly to the bottom of the range that was created on that swift move up either as a target or we can use it as an entry point. Once we fill back in this big range, which again is pretty
Speaker A
much an imbalance, we can look for a continuation out of it. So we can see a break structure to the upside and then we see a retrace down and then price continues higher.
Speaker A
Okay. So let me show you guys more examples of these BPRs and how they can be beneficial to us.
Speaker A
So this is another good example right here. What do we see? A very swift move down through here. So what do we know about pretty much from here all the way across? This is a very imbalanced price range. So, I'm pretty sure I took a
Speaker A
trade off of this as well. When was this? Uh, no, this was in December. But let's look right here. Where does this imbalance price range or look, boom, big dump down? Where does price finally start to like regain its senses? Right
Speaker A
down here. So, we know, okay, realistically, we can kind of we can drag this higher, but realistically, when did the dump down start? Boom. From this low, we fled down. Boom. Flood down. Awesome. This entire range is imbalanced.
Speaker A
And then what do we notice right when we crack above these highs right here? Like literally right when we push above these highs, look at these highs right here. The second that we push our head above these highs, bow, rapid fire, straight up
Speaker A
through the imbalance. And we can even narrow this down to two sets of imbalances or two sets of very illquid price ranges. This is a set of this is a illquid price range.
Speaker A
And then this is an illquid price range. And notice how price comes up, fills the illquid price range, okay? Balances out a little bit. Price comes down, fills in this illquid price range. And then boom, we bounce back up, fills in this illquid
Speaker A
price range. Okay? And then we can even notice look look look look we can even notice it within the same moves like this this whole price range was so illquid cuz you can see boom what happens even within there
Speaker A
rapid move up and then once price pushes underneath these lows boom rapid move down balances it out and then boom we finally start trading back to normal again. You are going to see this very very frequently on your guys' charts.
Speaker A
How is this going to be beneficial for you? Just like I said, well, we can use it either as finding an entry point and then understanding that, hey, once we push into this illquid price range, boom, we're going to rapid fire all the
Speaker A
way up to be able to balance out this illquid price range. So, we can boom, try and find some sort of bullish confirmation down here to take a trade up to be able to balance this out.
Speaker A
Or you can just look for it for confirmation. like maybe you see, okay, boom, price came up, balanced out this price action. Now, I'm going to be looking for shorts to come back down and balance out this price action. Again,
Speaker A
we're going to get into how we can put all of these confluences together for you guys um in a proper strategy, but uh this is I'm just kind of like I'm spitballing here so you guys can understand again. Okay, like this is
Speaker A
again it's very very obvious. Look, rapid fire move up. What is going to happen once we crack back underneath these lows? Rapid fire move down. And then look at this. What do we have?
Speaker A
Massive BPR. We have a boom rapid move up. Boom. Rapid move down. Okay, this is our this is our imbalance price range.
Speaker A
And it's really from here. So, what do we see the second that price is able to push above this high? What does it do? Rips all the way up through it. Rips all the way up through it to balance it out. We can I
Speaker A
mean it's it's I bro like do I even have to explain myself anymore? Huge imbalance price range. What do we do the second that we push underneath these lows?
Speaker A
Rapid fire all the way through it. Same like it's it's [ __ ] everywhere. Okay.
Speaker A
Rapid move up. The second that we push underneath these lows, boom, rapid move down. It is everywhere. And you can use these to your advantage. Okay. Boom.
Speaker A
Rapid move down. Once we push above these highs, boom, rapid move up. It's beautiful.
Speaker A
Okay. Um, same thing here. What do we have? Rapid move up. What do we do?
Speaker A
Rapid move down. Illquid price range that we can use either to boom, if we're taking shorts off of this, we can use it to target to understand that, hey, price is probably going to want to balance out this entire imbalance range and then
Speaker A
from there do whatever it wants to do, or you can look to take a trade off of it. Um, I mean, I feel like I've explained myself pretty thoroughly on on this. Again, sometimes they don't necessarily completely overlap, but we
Speaker A
can see this is a good example again from here down to here. Boom. Price fills this, consolidates a little bit, and then boom, rapid fire straight back through it.
Speaker A
Same thing right here. I mean, we can do this all day long. Boom. We have an imbalance price range right here. What do we do? Rapid fire through it. And then we can go back.
Speaker A
Boom. Rapid fire right back through it. And then boom. What do we do? Rapid fire right back through this. Very very beneficial concept. I'm like literally just as we are scrolling, we see it all the time. Boom, rapid move up. Boom,
Speaker A
rapid move down. You can use it to either look for entries or use it as targets. So that's BPR. Um, and that's pretty much what I wanted to cover in terms of the fair value gaps. Um, and yeah, really the last thing that we need
Speaker A
to cover with imbalances is inverse fair value gaps, and that's going to be tomorrow. Love and appreciate you guys.
Speaker A
I'll catch you guys for tomorrow's video. Peace.
Topics:market imbalancenew day opening gapnew week opening gapnew candle opening gapfair value gapBPRliquidity drawprice actiontrading strategyimbalance concepts
