Imbalance Indicator – FX Replay Guide

The Imbalance Indicator in FX Replay is designed to help traders spot inefficient price zones—commonly referred to as Fair Value Gaps (FVGs)—that can offer high-probability entry points. By pairing it with FX Replay’s replay and backtesting tools, you can test, refine, and optimize your strategy in real-time.

Step-by-Step: Using the Imbalance Indicator in FX Replay

1. Define Your Strategy First:

Before placing trades, clarify:

• Entry Criteria:
  • Will you enter when price returns to an imbalance zone?
  • Are you using confirmation (e.g., candle pattern or BOS)?
• Exit Criteria:
  • Do you take profits at a 2:1 or 3:1 R:R?
  • Are you targeting external liquidity or support zones?
• Risk Management:
  • Decide your stop placement (e.g., outside the FVG).
  • Determine fixed % risk per trade.

2. Backtest in Replay Mode:

• Choose Your Market & Timeframe:
  • Select a pair or instrument and timeframe that matches your style.
• Replay Past Price Action:
  • Navigate to historical data and activate the replay feature.
• Place Trades Based on Your Rules:
  • Wait for price to return to imbalance zones.
  • Use FX Replay’s Position Tool to define entries, stops, and take profits.
• Evaluate Strategy Metrics:
  • FX Replay tracks your trades across metrics like:
    • Win rate
    • Profit factor
    • Drawdown
    • Average R:R

3. Analyze & Optimize:

• Use the data to refine your entry logic.
• Adjust imbalance zone sensitivity or pair it with structure (BOS/CHOCH).
• Retest on different assets and market conditions.

4. Pro Tip: Strategy Example:

• Imbalance Entry: Price returns to a 5-minute imbalance created by a strong move.
• Entry: Limit order mid-zone.
• Stop: Just above/below the imbalance.
• Take-Profit: At next opposing liquidity sweep or OB.