ICT Concepts - The 9:30 AM FVG (New York Open Strategy) 🤫

Summary

In this video, the instructor dives into the concept of the 9:30 fair value gap, a key strategy for traders at the New York market open. The video outlines various setups, including the inversion of fair value gaps, how to identify potential reversals, and how to use these gaps as a tool for scalping and long trades. The instructor emphasizes the importance of timing, particularly with the 9:30 open and manipulation phases, to spot high-probability setups. The lesson also highlights how reclaiming fair value gaps can be a powerful indicator for entering trades. Overall, it's a practical guide for traders looking to capitalize on early market movements.

Takeaways

• 😀 The 9:30 Fair Value Gap strategy is crucial for identifying potential market reversals right after the New York open (9:30 AM EST).
• 😀 The 930 Fair Value Gap inversion is a powerful setup where, after a price drop and the formation of a fair value gap, a close above it indicates a potential long entry.
• 😀 When using the 930 inversion fair value gap, place your buy limit order at the high of the inverted gap and set your stop loss a few ticks below the low of the gap.
• 😀 The 930 fair value gap can be used in different ways, such as spotting bullish setups where the price runs into relative equal highs, trapping shorts.
• 😀 One key element of the strategy is the manipulation phase that involves running sell stops and trapping shorts before the price reverses.
• 😀 A reclaimed 930 Fair Value Gap, after the manipulation phase, can act as support, allowing traders to enter the market with confidence in the direction of the reversal.
• 😀 The 930 Fair Value Gap strategy can also be used in conjunction with high-probability PD arrays like breaker blocks and order blocks to strengthen trade setups.
• 😀 Reclaiming the 930 Fair Value Gap during the 950 macro time frame offers better chances for price to continue in the anticipated direction, often aligning with market inefficiencies.
• 😀 The importance of the first displacement after a manipulation phase is emphasized, where the gap created provides opportunities to enter trades targeting liquidity levels.
• 😀 Utilizing the 930 Fair Value Gap to identify breakaway gaps and high-probability setups within nested PD arrays can further refine entries, especially when combined with smart money concepts.

Q & A

What is the 9:30 fair value gap and why is it significant for trading?

The 9:30 fair value gap refers to the initial market inefficiency that occurs after the New York market opens at 9:30 AM (Eastern Standard Time). This gap can provide valuable insight into potential price movements, as it often signals a shift in market sentiment. Traders use it to identify setups that can lead to potential reversals or continuations.

How can a trader use the inversion of the 9:30 fair value gap to their advantage?

A trader can use the inversion of the 9:30 fair value gap by waiting for a body (candle close) to form above the gap after a down move. This indicates that the initial bearish move was a trap and that a potential reversal is occurring. The trader would then enter a long position at the high of the gap with a stop loss below it.

What is meant by 'trap shorts' in the context of the 9:30 fair value gap?

'Trap shorts' refers to traders who entered short positions expecting the market to go lower, but instead, they are trapped when the market reverses after the 9:30 open. These traders are forced to cover their positions, driving the price higher. The 9:30 fair value gap often forms during this trapping process.

How do relative equal lows and buy-side liquidity play a role in the 9:30 fair value gap strategy?

Relative equal lows indicate areas of sell-side liquidity where many traders are expecting the price to drop. Buy-side liquidity, on the other hand, refers to areas where buy orders accumulate, such as swing highs. Traders use the 9:30 fair value gap to spot potential reversal points where the price may run toward the buy-side liquidity after running the sell-side stops.

What does the term 'manipulation phase' refer to in the 9:30 fair value gap strategy?

The 'manipulation phase' refers to the initial market movements after the 9:30 open, during which the market runs stops, either sell-side or buy-side, and traps traders. This phase sets up the conditions for the market to later move in the opposite direction, allowing traders to capitalize on the reversal or continuation.

Why is it important to close back above the 9:30 fair value gap?

Closing back above the 9:30 fair value gap is crucial because it indicates that the initial market reaction has been reversed. If the price closes above the gap after a drop, it signals that the previous move was likely a false breakdown and that the market may now move higher.

What role does the 'breakaway gap' play in identifying strong market moves?

A breakaway gap occurs when the price moves sharply away from a previous consolidation, indicating strong momentum. In the context of the 9:30 fair value gap, identifying a breakaway gap helps confirm that the price is not just retracing but rather making a significant move away from a prior range, signaling the potential for a sustained trend.

What is meant by 'high probability PD arrays' in relation to the 9:30 fair value gap?

High probability PD arrays (Price Delivery Arrays) are price structures like order blocks or breaker blocks that are likely to support or resist price action. When these PD arrays are nested within or near a 9:30 fair value gap, they become more significant, offering higher probability setups for traders.

How does a trader decide when to enter a trade after a 9:30 fair value gap inversion?

A trader can enter a trade after a 9:30 fair value gap inversion when they observe a body close above the gap, signaling a potential reversal. The trader would place a buy limit order at the high of the gap with a stop loss just below it. The setup is considered valid if no body closes below the gap, confirming the reversal.

Why is the 9:30 fair value gap considered important for scalping strategies?

The 9:30 fair value gap is important for scalping because it provides clear, identifiable entry points for short-term price movements. Since the gap is formed early in the trading session and often signals a reversal or continuation, it gives traders a reliable opportunity to capitalize on small but consistent price moves within a short time frame.