What is an iFVG?

Summary

This video offers a step-by-step guide on trading using the 'inversion Fair Val Gap' strategy, which involves identifying gaps in candlestick charts where wicks do not overlap. The presenter shares their success with this method, earning over $3,000, and explains the difference between bullish and bearish gaps. They advocate for a contrarian approach, waiting for the gap to be violated before trading, and demonstrate this with examples on lower time frames. The video concludes with an invitation to join a Discord community for further discussion and learning.

Takeaways

• 📈 The speaker made over $3,000 using an 'inversion Fair Val Gap' trading strategy and offers to teach it step by step.
• 🔍 A Fair Val Gap (FVG) is identified by a lack of overlap between the wicks of the first and third candles, creating a 'gap' in price.
• 🐻 A bearish FVG is indicated by the first candle's wick not overlapping the third candle's wick, suggesting a downward price movement.
• 🐃 A bullish FVG is the opposite, where the wicks do not overlap, indicating an upward price movement.
• 🚫 The speaker advises against the common approach of shorting a bearish FVG or going long on a bullish FVG, as it often leads to traders getting stopped out.
• 🔄 Instead, the speaker waits for the FVG to be violated, i.e., the price trades and closes beyond the gap, signaling a potential trend reversal.
• 🕒 The strategy is best applied on lower time frames, such as the 5-minute chart, rather than the hourly chart.
• 📊 The speaker uses the strategy to identify potential entries by looking for a violation of a bearish or bullish FVG, followed by a confirmation signal.
• 🎯 For entry, a stop loss is set below the low of the FVG, and take-profit targets are set at significant highs or lows, aiming for a risk-reward ratio of 1.3 to 3.29.
• 📉 In a bearish example, the speaker waits for a close below the previously held FVG, indicating a potential bearish entry.
• 📈 The speaker emphasizes mastering the entry technique along with a narrative and bias as key to market success and offers further resources through a Discord link.

Q & A

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

A Fair Val Gap (FVG) is a hidden gap in price where the wicks of the first and third candles do not overlap, indicating a break in the price continuity.

How is a bullish FVG different from a bearish FVG?

A bullish FVG occurs when the wicks of the candles do not overlap, creating a hidden gap that suggests a potential upward price movement. Conversely, a bearish FVG indicates a potential downward price movement.

What does the term 'inefficiency' refer to in the context of FVGs?

Inefficiency is another term for a gap or a FVG, referring to the price discontinuity that occurs when the wicks of consecutive candles do not overlap.

What is the traditional approach to trading a normal FVG?

The traditional approach is to long a bullish FVG and short a bearish FVG, looking for a bounce in the case of a bullish gap and a rejection in the case of a bearish gap.

What is the opposite strategy mentioned in the script for trading FVGs?

The opposite strategy involves waiting for a FVG to be violated, i.e., for the price to close above a bearish gap or below a bullish gap, indicating a potential reversal of the expected direction.

What is the significance of the price closing above or below a FVG?

When the price closes above a bearish FVG or below a bullish FVG, it suggests that the market is likely to move in the opposite direction of the gap, indicating a potential entry point for a trade.

What time frame does the speaker prefer for trading inverse FVGs?

The speaker prefers using the 5-minute time frame for trading inverse FVGs, rather than the hourly time frame.

How does the speaker determine the entry point for an inverse FVG trade?

The entry point is determined when the price closes above a bearish gap or below a bullish gap, confirming the violation of the FVG.

Where does the speaker suggest placing the stop loss for an inverse FVG trade?

The stop loss is typically placed below the low of the candle that closed above the bearish gap or above the high of the candle that closed below the bullish gap.

What is the potential risk-reward ratio the speaker targets in an inverse FVG trade?

The speaker targets a risk-reward ratio of around 1.3 R for the first take-profit level and 3.29 R for the second take-profit level.

How does the speaker use the concept of 'narrative' and 'bias' in conjunction with inverse FVG trading?

The speaker suggests that mastering the entry with a narrative and a bias, in addition to the inverse FVG strategy, can help traders to better understand and navigate the markets.

What additional resources does the speaker offer for those interested in learning more about trading strategies?

The speaker offers a free Discord link with over 15,000 members where people trade the same strategies discussed in the video, as well as potential free classes and further information in the video description.