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Imbalances and exhaustion: define the comparison
Three bright cells look impressive. First ask which numbers were compared and how small they were.
Calculate a diagonal ratio with explicit thresholds and distinguish it from a guaranteed continuation or reversal.
An imbalance is a rule-based comparison of executed quantities; exhaustion is an interpretation of fading activity and price progress.
In a diagonal footprint comparison, ask volume at one price can be compared with bid volume one tick below it. A sell comparison mirrors this: bid at one price versus ask one tick above. A horizontal comparison uses the same row instead. Check which mode your chart uses.
Our learning rule marks a buy imbalance when ask volume divided by bid one tick lower is at least 3, with ask volume at least 50. We exclude zero denominators instead of inventing an infinite ratio. These are disclosed study settings, not a universal definition or a proven profitable threshold.
Several adjacent marked rows are often called stacked imbalances. They show repeated comparisons meeting that rule in this sample. They do not identify an institution, reveal whether positions are opening or closing, or guarantee that a revisit will hold as support.
Exhaustion is a possible fading of aggressive activity as a move struggles to extend. A tiny top-row print can also reflect a brief visit, data limits or aggregation. Compare it with previous activity and the subsequent price response; a small number alone cannot prove the move has ended.
Let’s work through it
- Declare diagonal or horizontal mode and threshold settings.
- Calculate the ratios, including minimum-size and zero rules.
- Compare the marked cells with price progress and record failures.
Let’s use numbers · hypothetical example
At 100.00, 100.25, 100.50 and 100.75, bid values are 20, 30, 40, 10 and ask values 10, 70, 100, 130. Diagonal buy ratios are 70/20 = 3.5, 100/30 ≈ 3.33 and 130/40 = 3.25. All three pass our rule. A later top ask of 5 instead of 130 is less activity there, not a guaranteed reversal.
Easy mistakes to watch for
- Comparing the wrong diagonal or calling every colour a 3:1 ratio.
- Treating 3 versus 1 as equivalent evidence to large quantities.
- Assuming a zero or tiny extreme print must be revisited.
Keep in mind
Highlighting is a display rule. Changing thresholds, row grouping or feed can change the pattern without changing the underlying market.
Your turn
Raise the ask minimum to 120. Which of our three highlighted ask cells still qualifies?
A quick check before we move on
With the ask minimum raised to 120, which cell still passes?
- The ask of 70 at 100.25
- The ask of 130 at 100.75
- Every cell, because ratios are above 3
Check answer
The ask of 130 at 100.75 Only 130 meets the new minimum of 120, and 130/40 still exceeds 3. A ratio test and a size test are separate conditions.
Sources and further reading
- static.ninjatrader.com/support/helpGuides/nt8/order_flow_volumetric_bars.htm
- www.sierrachart.com/index.php
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
