Selling Imbalance
Order Flow Analysis glossary · Absorption, Exhaustion & Imbalances
Definition
A footprint condition at price P_i where bid volume exceeds the ask volume one tick higher by a defined ratio: fracV_bid,iV_ask,i+1 ≥ R_threshold. Common thresholds are 250% (moderate), 300% (strong), and 400% (extreme). A selling imbalance flags concentrated aggressive selling at that level — the diagonal comparison shows sellers hitting the bid far harder than buyers were lifting the offer just above.
Selling Imbalance in plain English
Picture a price ladder where each rung is a price, and at every rung you can see how many contracts sold to eager sellers (hitting the bid) versus bought from eager buyers (lifting the ask). A selling imbalance means that at one rung, the aggressive selling massively outweighs the aggressive buying on the rung just above it — sellers were slamming the door far harder than buyers were pushing it open. The tool compares these two numbers diagonally and only flags it when the ratio crosses a set line, like 250% (moderate), 300% (strong), or 400% (extreme). In plain terms: it's a spot where sellers showed real teeth, which can hint that price wants to fall from there.
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