Core Concepts

Why imbalance matters

Every candle on your chart is an auction. When buyers and sellers agree, price rotates in a range and trades are filled efficiently on both sides. When one side overwhelms the other, price displaces: it jumps, leaving stretches where almost no two-way business was done.

Markets have a well-documented habit: they tend to come back to those neglected areas. Resting orders were skipped, positions were left unhedged, and the auction is “unfinished” there. The pull back into an inefficiency is called rebalancing, and it is the single behavior IIF is built to measure, map, and time.

Fair Value Gaps (FVGs)

The cleanest fingerprint of displacement is a Fair Value Gap: a three-candle pattern where the middle candle moves so fast that the first candle's range and the third candle's range never overlap. The hole between them, from candle 1's high to candle 3's low in a rally, is the gap.

A bullish FVG (formed in an up-move) tends to act as support when revisited; a bearish FVG tends to act as resistance. But the deeper meaning is informational: every open gap is unresolved business, and a chart accumulating many unfilled gaps in one direction is building reversion pressure.

Mitigation & fills

When price later trades back into a gap, the gap is being mitigated. A gap can be partially filled (price entered but didn't traverse it) or fully filled. IIF goes one step further than the visual: in volumetric modes it also counts opposing-side volume traded inside the gap, so an imbalance can be considered substantially resolved even before the chart shows a complete fill. That distinction powers the CVMI.

OrderBlocks

Displacement doesn't start from nowhere. The zone where the move launched, typically the last opposing candle or consolidation before the break, is called an OrderBlock (OB). The reasoning: that's where large participants accumulated their positions, so if price returns, the same participants are likely to defend it.

• A bullish OB is the origin of an up-move, expected to act as demand when retested.
• A bearish OB is the origin of a down-move, expected to act as supply.

IIF detects OrderBlocks on a higher timeframe (HTF) than your chart, because institutional zones are more meaningful when they are visible to bigger players. It then does something unusual: it looks insideeach HTF block at your chart's timeframe and maps every small FVG within the zone. Those internal gaps become a precise, measurable definition of how “used up” the block is. That is the SOMM in one sentence.

Liquidity & sweeps

Liquidityis where orders rest. Above every obvious swing high sit buy-stops (from short sellers and breakout buyers); below every swing low sit sell-stops. Price is drawn toward dense pools of resting orders because that's where large players can fill size.

A sweep(or stop hunt) is the classic move: price pokes just beyond a level, triggers the resting stops, then snaps back. To an untrained eye it looks like a failed breakout; to an orderflow reader it's often the completion of a setup, because the fuel above or below the level has been consumed. IIF tracks sweeps at both pivot levels and OrderBlock edges (the Block Sweep signal), and its Liquidity Matrix shows you where untested pools are still waiting.

Not all moves are equal

Two rallies can look identical on candles and mean opposite things. IIF grades every displacement event along a spectrum between two orderflow archetypes:

The classification is not binary. The engine evaluates participation quality, the character of the expansion, and the surrounding activity regime, then scales each imbalance's impact accordingly. You'll see this grading at work in the CVMI's weighting logic.

How IIF uses all of this

• CVMI sums every open gap, weighted by displacement quality, into one pressure reading.
• SOMM turns OrderBlocks + internal gaps into precise mitigation percentages with clear lifecycle rules.
• Liquidity Matrix aggregates gap volume or pivot liquidity into a visual map of unfinished business.
• Signals stamp the chart at the moments where these threads intersect.