Boot Camp Day 14: Fair Value Gaps Pt. 1
Summary
TLDRIn this Miami-based boot camp video, the speaker discusses fair value gaps, liquidity voids, and market imbalances. They explain how these concepts help traders understand price movements and execute trades with confidence, rather than relying on support and resistance levels. The video also emphasizes the importance of discipline and balance in trading and life.
Takeaways
- đ The speaker is recording a video on fair value gaps, liquidity voids, and market imbalances, with the intent to break down complex concepts into simpler parts for better understanding.
- đ Fair value gaps, liquidity voids, and imbalances are essentially the same concept, which the speaker prefers to call 'liquidity voids', representing areas in the market where there are no opposing orders.
- đ The speaker emphasizes the importance of understanding these concepts to identify areas of the market where price moves are likely to occur without resistance.
- đ€ The speaker expresses a preference for trading based on market confluence and actual order fills rather than relying on support and resistance levels alone.
- đ The concept of a liquidity void is used to explain why prices can move sharply in one direction without hesitation due to the absence of opposing orders in that price range.
- đ The speaker plans to discuss how to spot these liquidity voids in a future video, highlighting their importance in trading strategy.
- đĄ Fair value gaps are particularly useful for understanding retracements in the market, helping traders to identify potential entry points.
- đ The speaker suggests that by combining various trading concepts like liquidity sweeps, breaker structures, and fair value gaps, traders can create a robust and versatile trading strategy.
- đ The speaker believes that these trading concepts can be applied universally across different financial markets and time frames.
- đ The speaker encourages viewers to simplify their trading approach by focusing on market execution and order fills rather than relying on subjective chart patterns.
- đȘ The video concludes with a motivational message, urging viewers to balance work and fun, and to seek growth through facing challenges and discomfort.
Q & A
What is the main topic of the video?
-The main topic of the video is discussing fair value gaps, liquidity voids, and imbalances in the market.
What does the speaker plan to do with the concept of fair value gaps?
-The speaker plans to split the concept into three separate videos to help the audience understand it better and use it for trading decisions.
Why does the speaker prefer using fair value gaps over support and resistance trading?
-The speaker prefers fair value gaps because they are based on actual market confluence, orders being filled, and seeing market movements, rather than relying on support and resistance levels which they find less reliable.
What is a liquidity void according to the speaker?
-A liquidity void is a price range where there are no contradicting orders, leading to a lack of liquidity and causing significant price movements without resistance.
How does the speaker describe the relationship between fair value gaps and market trends?
-The speaker describes fair value gaps as areas where prices are likely to retrace to, as they represent a lack of liquidity that market makers can exploit to move prices in a desired direction.
What is the speaker's view on the importance of understanding fair value gaps for trading?
-The speaker believes that understanding fair value gaps is crucial for making confident trading decisions, as it provides insights into where the market might move based on actual market conditions rather than just technical analysis.
How does the speaker plan to use fair value gaps in trading strategies?
-The speaker plans to use fair value gaps for retracements and secondary entries, identifying areas where prices might draw back to and using them in conjunction with other market structures like breakers.
What is the speaker's advice on balancing work and leisure?
-The speaker advises finding a balance between doing something productive and having fun, emphasizing the importance of not just working all the time and taking time off to avoid burnout.
What is the speaker's approach to trading in different financial markets?
-The speaker's approach is based on universal market principles that can be applied to any financial market, focusing on market execution and orders being filled.
What homework does the speaker assign at the end of the video?
-The speaker assigns homework to do something productive after watching the video, such as taking notes, exercising, or doing something that challenges comfort zones.
Outlines
đ Understanding Fair Value Gaps and Liquidity Voids
The speaker introduces the concept of fair value gaps, liquidity voids, and imbalances in the market. These terms essentially refer to a lack of orders in a specific price range, leading to significant price movements without resistance. The speaker emphasizes the importance of understanding these gaps for trading decisions, particularly for retracements rather than entries. They explain that these gaps can indicate where the market might naturally draw back to, and how traders can use this information to make more confident trades. The speaker also mentions that they will cover how to spot these gaps in future videos.
đĄ The Importance of Market Confluence in Trading
In this paragraph, the speaker discusses the value of using market confluence and actual order execution as a basis for trades, rather than relying on support and resistance levels. They argue that this approach provides a safer and more logical method for entering trades. The speaker also outlines a strategy that involves identifying liquidity sweeps, trend formations, and fair value gaps, and then using these insights to execute trades with high confidence. They encourage viewers to apply these concepts across different time frames and financial markets, highlighting the versatility of this trading approach.
đïž Balancing Work and Fun: A Call to Action
The speaker concludes the video with a motivational message, urging viewers to balance their work and leisure activities. They emphasize the importance of doing something productive after watching the video, such as exercising or engaging in other challenging activities. The speaker shares their personal experience of making and uploading the video while on vacation, demonstrating the value of pushing oneself out of comfort zones. They also touch on the need for discipline in trading and hint at future discussions on developing trading discipline.
Mindmap
Keywords
đĄFair Value Gaps
đĄLiquidity Voids
đĄImbalances
đĄMarket Confluence
đĄSupport and Resistance
đĄLiquidity Sweeps
đĄBreaker Structure
đĄRetracements
đĄExecution
đĄDiscipline
đĄProductivity
Highlights
Introduction to fair value gaps, liquidity voids, and imbalances in the market.
Fair value gaps are areas where there are no contradicting orders, causing price movements without resistance.
Liquidity voids are price ranges with no resting buy or sell orders, leading to significant price movements.
Fair value gaps are used for retracements, not necessarily for trade entries.
Market makers can execute orders in areas of liquidity voids, moving the market in their desired direction.
Fair value gaps help traders understand where price wants to draw to during retracements.
Traders can use fair value gaps for secondary entries after observing a breaker structure on a lower timeframe.
The importance of identifying a lack of liquidity in an uptrend to predict future price movements.
Using fair value gaps in conjunction with trend analysis and market structures for more accurate trading decisions.
The concept of liquidity sweeps and how they can be used to understand market movements.
Executing trades based on market confluence and order execution rather than just support and resistance levels.
The simplicity of trading strategies based on understanding market liquidity and order flow.
Applying these concepts to any financial market and timeframe, making the trading approach versatile.
The importance of balance between work and fun, and the role of discipline in trading success.
Encouragement to do something productive after watching the video, emphasizing personal growth.
The upcoming discussion on discipline and its impact on trading performance.
The speaker's personal example of maintaining productivity even while on vacation.
Transcripts
all right this is attempt number two to
make this video
um we are currently in Miami right now
and I recorded this
I recorded this
um out on the balcony but my uh computer
overheated so this is going to be take
two and probably a sloppier version of
it but uh what's good Jets uh welcome to
[Â __Â ] boot camp day I don't even know
16 or 15 maybe four I have no clue what
day it is
um but yeah we're in this [Â __Â ] I think
we tapped it what like uh we've stopped
two weeks now right
um but anyways today we're talking about
fair value gaps
um liquidity voids imbalances whatever
you guys want to call them in the market
and most of the time we would do this on
like a little chart but as you guys know
how we've been setting like this whole
[Â __Â ] up uh for you know this boot camp
I'm pretty much going to split up all
those little building blocks into three
separate videos
um just so you guys have like a chance
to take everything in and like actually
properly understand the [Â __Â ]
um so today it's literally just gonna be
one-on-one me explaining what fair value
gaps are why we want to use them how we
can understand them in the market to you
know actually be confident in taking a
trade based off of it because for me I
would much rather you know have a uh
take a trade based off of actual like
Market Confluence and orders being
filled and actually seeing that versus
oh it bounced off a floor or like it hit
a ceiling so it's going to go down like
are we being dead ass about that off of
a drawing that you put on chart you know
like I have no hate towards supporting
resistance Traders it just doesn't make
sense to me why you would you know
essentially bet on something
um like that but I mean hey some people
make money doing it this just makes more
sense to me it makes me feel safer about
putting money into the market so with
that being said let's get into fair
value gaps part [Â __Â ] one boys
um so what is a fair value Gap what's a
liquidity void what's an imbalance it's
literally all of those are pretty much
the same thing so I like to call it just
a liquidity void so similar to how we
talked about liquidity in those past
three trading videos that's where you
know orders are residing that's where
Market wants to Target to take out those
orders to execute those orders at this
certain price point this is quite
literally the opposite this is a void a
price range where there are no no
contradicting orders so if we see a big
move up right why are we seeing that
move up in the first place because
there's no sell orders through that
price range that's the that's the
liquidity void that's the imbalance
that's the fair value Gap same thing to
the downside right if we see a big drop
to the downside with no like hesitation
and it just dumps right that's a
liquidity void that's the imbalance and
why is why is it a liquidity void
because there's literally no no resting
buy orders throughout that massive drop
down if there were resting buy orders
price would go down oh pull up a little
bit go down a little bit more yes maybe
it's bearish and it still closes bearish
but there's still resting buy orders so
this is what
um it helps us do we can actually be
able to spot where there is no liquidity
on the market and if we think about this
logically right when we're within a
trend and price obviously moves with
higher highs and higher lows where are
those higher lows going to draw to where
are those retracements going to draw to
you know probably into those areas that
where liquidity was not before right and
then what's going to happen once we get
into those areas market makers can
execute their orders because they know
right there is a emptiness of liquidity
they know that right when they Place
their orders within there Market's going
to move in their Direction so how is
this beneficial to us how can we you
know we'll talk about how we can spot it
in two days on the next trading video
but why is this beneficial to us one it
helps us accurately kind of understand
okay where does price want to draw to
when it's retracing right fair value
gaps are used for retracements I don't
use fair value gas for
like entries necessarily I use liquidity
sweeps to understand where Market's
going and then I use fair value gaps to
kind of like
figure out where price maybe wants to
draw to or for like a secondary entry
and we'll go into all of that stuff once
we get deeper into strategy but
um this is super useful because we see
price in an uptrend drawing back down
and we can find a liquidity void and
then we see a reaction off of that or
like a breaker structure on a lower time
frame boom like why wouldn't you execute
that because you know there's a lack of
orders lying within there you know the
trend is going up and if you see a
breaker structure on a smaller time
frame after a fair value gap or an
imbalance or liquidity void getting
filled on a larger time frame why
wouldn't you enter there you know that's
literally you know you see okay prices
in this range where there's a lack of
liquidity for opposing orders right if
we're in an uptrend there's no sell
orders laying within here and then we
see a breaker Market structure on a
lower time frame why wouldn't you
execute right doesn't that make so much
sense for you to execute on a trade like
that versus oh price hit
my
[Â __Â ] ceiling are we being dead ass
right now like let's use our let's use
our brains okay
um so I mean with that being said that's
that that literally is what what fair
value gaps are it's literally just a
lack of orders within the market and
that's what causes the imbalance to be
made the
um the big ass candle right you guys are
and we'll talk about how to spot them in
two days but when you guys like see them
within the market most the time it's a
big candle down why because there's
literally no orders stopping it from
dropping that far down
um same thing with the upside there's no
sell orders within there that's stopping
it from pushing so high up
um and then when price comes back into
that range
right it gives the market makers to you
know the opportunity to keep pushing
price in the direction that they want to
um and again once we start getting all
these pieces it's like you know I'm sure
even after this video you'll you guys
were so we'll start looking into that
even more by just seeing okay we got
liquidity sweep breaker structure we see
the trend starting to form and then okay
now I have a fair value Gap oh I notice
it gets filled smaller time frame break
of structure boom we're in okay and it's
it's literally as simple as that like
that people really make trading a lot
harder than it has to be and you guys
can really [Â __Â ] simplify it if you
just say okay this is exactly how price
moves you know what do we use for Value
gaps for retracements cool when we see a
retracement in the market figure out
where the imbalance is scale down to a
lower time frame find a break of
structure continuation boom like come on
like that [Â __Â ] is so easy
um and then you know liquidity sweeps
okay we see liquidity taken out of the
market okay if we see a breakup
structure perfect execute right all of
these building blocks we I pretty much
have the set up so it's like one size
fits all right you can trade this on any
time frame you can trade this
with any [Â __Â ] pair right you can
literally apply these Concepts to every
Financial Market
um because this is how price literally
moves this is how the market moves and
that's why I love the way that I trade
because you can do this on any time
frame if you can't sit on your computer
for like two hours a day
um you know like scalping or like you
know actually monitoring it you can do
swing trades where it takes several days
to hit
um and as we start adding all the
building blocks you'll start to see like
okay I can use this I can use this and I
don't really understand this so I don't
need it right that's the nice thing
about this all of these are pretty much
execution like pieces and it's just like
which ones you want to use and the more
that you know the better because then
it's like holy [Â __Â ] now I have like five
different confirmations that I can go
off of that are all very high Confluence
and that are all based off of actually
like Market execution and orders being
filled who wouldn't want to place a bet
on that that's why I love trading
because I can be like okay yeah I'm
actually going to bet on this because I
actually believe in this versus you know
oh like I think it's going to go down
because it you know like hit a ceiling
just [Â __Â ] don't make no sense
um so with that being said
that's where value gaps explained we'll
talk about how to spot them tomorrow no
homework today
um actually the only homework you have
to do is like do something that's
actually productive
um don't sit around
um I mean if you're watching this video
odds are you're doing something
productive right now but
um do something else after this video so
you watch this video go take notes go on
a run go to the gym do something that's
hard do something that's uncomfortable
trust that's where you grow all right
when you put yourself in uncomfortable
situations that's where the growth
begins and amen I'm still trying to you
know get uncomfortable even while on
vacation we're in Miami right now I very
well could have just said like yo the
Wi-Fi's ass
um I don't want to upload this video but
here I am on vacation making a [Â __Â ]
video and uploading it on ass Wi-Fi so
um and and then after this it's like
cool now I feel accomplished I feel okay
with myself like I feel proud of myself
I've got something good done for today
and then I can go have my fun like
there's there's a there's a perfect
balance of having fun and actual work
like and to be able to understand that
like if you're working 24 7 that's why I
always say like take one day off if
you're working 24 7 bro you're going to
get burnt out you need a good balance
but it's also like you can't just say oh
yeah I want my balance and then just
like not actually work right there's
there's you know you you know the
difference
um but yeah that being said go do
something fun uh do something productive
and then go do something fun
um I'll see you guys tomorrow when we
talk more about discipline and how we
can you know actually start [Â __Â ]
whipping your ass into shape because we
know how [Â __Â ] terrible you guys are
at staying disciplined Within These
markets so hopefully we can start
talking about some tips some tricks some
actual exercises
um for you guys to start practicing to
you know actually get you in mind so
that being said I'll see you boys
tomorrow peace out
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