Imbalance: Imbalance occurs when there is a significant difference between buying and selling activity in the market. This can be visually observed on a price chart as a sudden, sharp move in one direction, creating an imbalance between supply and demand. Traders often look for imbalances as potential reversal points, as they suggest a shift in market sentiment.
Order Block: An Order Block refers to a specific price area on a chart where significant buying or selling orders were executed. These blocks can act as support or resistance levels in the future. Traders often look for order blocks to identify potential reversal or continuation points. These levels are considered important because they represent areas where institutional or large traders placed significant orders.
Swing Point: Swing points are pivotal price levels that mark a change in the direction of a trend. They are characterized by a high and a low point on a chart and can be used to identify trend reversals or continuations. A swing high is formed at the peak of an upward price movement, while a swing low is formed at the trough of a downward movement. Recognizing swing points is essential for understanding the current market trend and anticipating potential changes.