My Secret To Having A Strong Bias - Inverse FVG's

Summary

This video tutorial delves into the concept of inverse fair value gaps, a trading strategy used to identify market trends. It explains the basics of fair value gaps and then contrasts them with inverse fair value gaps, which occur when a gap is breached and subsequently acts as support or resistance. The presenter uses real-time chart examples to demonstrate how these gaps can provide a bias for future price movements and help traders understand potential draw on liquidity. The video is a valuable resource for traders seeking to refine their strategies and gain confidence in market analysis.

Takeaways

• 🔍 The video focuses on explaining inverse fair value gaps in trading.
• 📊 Fair value gaps are typically identified within a three-candle structure in candlestick charts.
• 📉 An inverse fair value gap occurs when a fair value gap is broken through and then acts as support or resistance.
• 🔄 The inverse fair value gap behaves similarly to how resistance can turn into support and vice versa.
• 💡 The concept is used to understand potential support levels once a fair value gap is violated.
• 📝 Examples of inverse fair value gaps are provided to illustrate how they can indicate market direction and bias.
• 📈 These gaps help traders identify the likely direction of price movement by showing which gaps are respected or disrespected.
• 🛠 Traders can use inverse fair value gaps to determine strong biases and anticipate future price actions.
• 👀 Observing these gaps across different time frames (e.g., 5-minute, 15-minute charts) is crucial for accurate analysis.
• 🤔 The video encourages viewers to incorporate inverse fair value gaps into their trading strategies for better decision-making.

Q & A

What is a Fair Value Gap (FVG) in trading?

A Fair Value Gap is a three-candle structure in trading where a gap is created between the wicks of the first and third candles, representing an imbalance or inefficiency in the market.

How is an Inverse Fair Value Gap different from a regular Fair Value Gap?

An Inverse Fair Value Gap occurs when a regular Fair Value Gap is broken through and then acts as support or resistance, depending on the direction of the breakout.

What is the significance of a Fair Value Gap in technical analysis?

Fair Value Gaps indicate areas of potential support or resistance and can signal future price movements when the gap is respected or disrespected by the market.

How can traders use Inverse Fair Value Gaps to their advantage?

Traders can use Inverse Fair Value Gaps to gauge market strength and bias. If a Fair Value Gap is broken and then holds as support or resistance, it can indicate the direction of future price movements.

What does it mean when a Fair Value Gap 'disrespects' a level?

When a Fair Value Gap disrespects a level, it means that the price breaks through the gap without holding it as support or resistance, indicating a potential shift in market direction.

Why is it important to consider both bullish and bearish Fair Value Gaps?

Considering both bullish and bearish Fair Value Gaps helps traders understand market sentiment and potential reversal points, enhancing their trading strategy and bias.

How do traders determine if a Fair Value Gap will act as support or resistance?

Traders observe price action around the Fair Value Gap. If the price breaks through and holds above the gap, it acts as support; if it holds below, it acts as resistance.

What role does market structure play in analyzing Fair Value Gaps?

Market structure helps traders identify key levels and potential reversals. Observing Fair Value Gaps within the context of market structure provides insights into price direction and strength.

Can you provide an example of how an Inverse Fair Value Gap is used in a real trading scenario?

In a bearish scenario, if a bearish Fair Value Gap is broken and the price comes back to hold it as support, traders may use this as a confirmation to enter a long position, expecting higher prices.

What is the main takeaway from understanding and using Inverse Fair Value Gaps in trading?

The main takeaway is that Inverse Fair Value Gaps help traders build confidence in their market bias and trading strategy by indicating areas of support and resistance, aiding in the prediction of future price movements.