FVG Hidden Secrets (Strong vs Weak)

Summary

This video explores a trading strategy based on fair value gaps (FVGs), emphasizing the importance of time frame context and price action. It explains how to identify strong and weak FVGs, using them to predict market movements and target liquidity. The video also stresses the significance of respecting FVGs and recognizing when they are disrespected, which can signal entry points for trades. The content further highlights the need to analyze the market at different time frames, with a focus on weekly cycles and verified gaps for high-probability setups. Overall, the strategy encourages minimizing randomness and trading with a clear, verified approach.

Takeaways

• 😀 Strong fair value gaps are more reliable when they align with higher timeframes, such as daily or weekly charts.
• 😀 Weak fair value gaps are less dependable, as price action often fails to follow through and trades back into the gap multiple times.
• 😀 Fair value gaps act as indicators of liquidity concentration, helping traders predict where price may move next.
• 😀 When trading lower timeframes like one-minute charts, always consider the context of higher timeframes to avoid making unreliable decisions.
• 😀 A bullish fair value gap is more significant when it disrespects or breaks a previous bearish fair value gap, and vice versa.
• 😀 The target for trades can be derived from previous price action and PD arrays, which highlight areas of strong liquidity.
• 😀 A high-probability entry occurs when price respects a previous fair value gap, indicating a valid trade opportunity.
• 😀 Avoid cluttering your chart with too many PD arrays, as they can make price action appear random and confuse your decision-making.
• 😀 Mentorship and real-time trading conditions are crucial for mastering fair value gap strategies and improving trading skills.
• 😀 The strategy revolves around understanding market structure through fair value gaps, offering a simplified and more reliable approach to trading.
• 😀 Traders should aim to trade with the overall trend by respecting bullish or bearish fair value gaps in the market, while also considering liquidity points.

Q & A

What is the primary concept discussed in the video?

The primary concept discussed in the video is the use of **fair value gaps (FVGs)** in trading to identify high-probability entry and exit points by analyzing gaps in price action.

What are fair value gaps (FVGs) in trading?

Fair value gaps (FVGs) are areas in price action where a gap exists, meaning there was no trading between two price levels. These gaps can be used to identify potential areas for price to revisit, either as support or resistance.

How are strong and weak fair value gaps differentiated?

Strong FVGs are respected by the price action, meaning the price returns to fill the gap and continues in the direction. Weak FVGs, on the other hand, are disrespected or ignored by price, indicating lower probability of success.

What is meant by a 'disrespected' FVG?

A 'disrespected' FVG refers to a gap that price does not follow through with once it enters. For example, a bullish FVG being ignored by a bearish movement would indicate a weaker setup and lower probability of success.

What is the significance of analyzing multiple timeframes in trading FVGs?

Analyzing multiple timeframes helps ensure that the lower timeframe trades align with the higher timeframe trends. It prevents making trades in isolation, ensuring that the overall market context is considered.

How do strong and weak FVGs tell a story in trading?

Strong and weak FVGs reveal the market's liquidity and potential direction. Strong FVGs indicate areas where the price may continue in a certain direction, while weak FVGs signal exhaustion or a lack of follow-through, suggesting the market may not respect those levels.

What is the relationship between fair value gaps and liquidity?

Fair value gaps represent areas where liquidity may reside, and identifying strong or weak gaps can help pinpoint where the market is likely to move next, either seeking liquidity above or below certain levels.

Why is it important not to clutter charts with too many PD arrays?

Cluttering charts with too many PD arrays can lead to confusion and randomness in price action. By focusing on FVGs instead, traders can simplify their analysis, reducing distractions and improving decision-making.

What is the role of mentorship and community in the trading strategy presented?

Mentorship and community play a key role by offering real-time insights, live trading setups, and further education, helping traders refine their strategies and improve their performance. The video encourages joining a team for hands-on experience and guidance.

What is the 'higher probability fair value gap' and how is it identified?

A 'higher probability fair value gap' is identified when a gap is respected by price action, especially when it aligns with the context of higher timeframes. The gap provides a strong entry point when it is not disrespected and is in line with the overall trend.