TIMESTAMPS
0:01 – INTRO
0:40 – UTILITY
What is a Fair Value Gap (FVG)?
How to identify a FVG.
Common setups on a FVG.
Differences between FVG and Single Prints.
🔎 03:34 Identifying a FVG.
* Similar to SPs, after a FVG is formed, and due to price diverging from balance, price tends to then gravitate towards (retest) that area to determine if “Fair Value” was properly established.
06:50 – IMPLEMENTATION
🔑 An advantage of FVG setups is they have a set of rules. For example, stop losses are generally placed at the origination candle of the three-candle formation.
🔎 09:12 Example of a downtrend where FVGs are used as entry points for trades.
* FVGs are best used on the 5-minute and 15-minute time frames.
14:43 A common mistake individuals make is to believe that every gap is created equal. Gaps are not just for entries; they are also magnets for price. Common sense is needed.
Use PDPA and PDVA to view “Balance” as price attempts to “test” these levels, you will see whether price remains in balance or breaks out.
One of the best ways to maximize the potential of a FVG is to identify a swing high or swing low FIRST before analyzing if a FVG is forming. This will give a proper invalidation.
During a trending, one-time-frame market, FVGs are more of a target for TPs than good entry points.
🔎 18:36 Example of a FVGs on the 30-minute time frame, including the 50% Fibonacci tool.
23:46 – TIPS & TRICKS
★ FVGs are primarily effective due to their established set of rules. Risk to Reward is fixed in a three-candle formation.
★ It is advised to utilize FVGs alongside other tools, such as footprint to determine if a FVG has enough “push” towards the desired target.
★ Do not confuse FVGs and Single Prints, they’re completely different!
24:53 – FINAL THOUGHTS