What it means
On a footprint chart, an imbalance is a price where aggressive volume on one side is much larger than on the other, compared diagonally (ask at one price versus bid one tick lower), for example 300% or more. Stacked imbalances are three or more consecutive imbalanced prices in the same direction.
Why traders use it
A stack shows aggressive buyers (or sellers) lifting price through several levels in a row. When price returns to that area, traders expect the same side to defend it.
Chart examples
Stacked buy imbalances as support
How to identify it objectively
- 1Use a footprint chart with a fixed imbalance ratio (for example 3:1).
- 2Look for three or more consecutive buy (or sell) imbalances in one candle.
- 3Mark the stack's price range.
- 4Watch the first retest.
Bullish use
- 1A bullish candle with stacked buy imbalances.
- 2Price returns into the stack.
- 3A bullish reaction there: enter, stop below the stack.
Bearish use
- 1A bearish candle with stacked sell imbalances.
- 2Price returns into the stack.
- 3A bearish reaction there: enter, stop above the stack.
What confirms it
- The stack formed with displacement.
- Reaction on the first retest.
What invalidates it
- Price closes through the stack.
How a hypothetical setup is built
Entry
On a reaction close inside the stack on the first retest.
Stop
Beyond the stack.
Target
The high of the candle that created it, then beyond.
A hypothetical illustration of how the concept is turned into a plan, not a recommendation. Practise it on a paper account first.
Related concepts
- Order FlowAbsorption
- Fair Value Gaps & Order BlocksOrder Blocks
- LiquidityLiquidity Void
- Full guide on The TradeskillFootprint Chart Explained
Historical testing
Not tested on The Tradeskill. Imbalance ratios and tick sizes change results a lot.
Limitations: when it fails
- Requires reliable tick-level data.
- Ratios are arbitrary.
- In very fast markets stacks appear everywhere.
Knowledge check
Pick an answer to see the explanation. Nothing is saved.