How to Use ICT's 1st Presented FVG (Powerfull)

Summary

In this video, the presenter explains the concept of the 'first presented fair value gap' and how it plays a crucial role in trading strategies. The fair value gap, a key level in the market, is a strong support or resistance point that can be used for entries or as a take-profit target. The presenter highlights how price repeatedly references these gaps and demonstrates real-life trade examples. Key strategies, including using these gaps in conjunction with market structure analysis and smart money concepts, are covered. The video aims to help viewers improve their trading skills and profitability.

Takeaways

• 😀 The 'first presented fair value gap' is a powerful tool for identifying key market levels, usually occurring after the 9:30 AM market open.
• 😀 A fair value gap forms when there's a difference between the open and close prices, signaling potential market reversals or entry points.
• 😀 It is important to wait for the first presented fair value gap after 9:30 AM, as the one formed during the 9:30 candle itself is not counted.
• 😀 The first presented fair value gap acts as a strong support or resistance level, with price frequently revisiting these levels.
• 😀 You can use the first presented fair value gap as an entry point to trade in the direction of the market's movement after it retests this key level.
• 😀 The first presented fair value gap can also serve as a take-profit target, especially when the market shows a clear shift in direction (e.g., SMG, change in delivery).
• 😀 Price often respects the first presented fair value gap multiple times, making it a reliable tool for traders to anticipate price movement.
• 😀 In combination with other market analysis, such as smart money concepts (SMC) and change of delivery, the first presented fair value gap can help confirm a trade bias.
• 😀 The concept of resistance becoming support and vice versa is crucial when analyzing fair value gaps, as broken resistance levels may act as future support.
• 😀 Traders should be cautious of market conditions and potential false signals, but the first presented fair value gap often leads to profitable trades when combined with proper risk management strategies.

Q & A

What is the 'first presenter fair value gap' and how is it different from a regular fair value gap?

The 'first presenter fair value gap' refers to the first fair value gap that forms after 9:30 AM during the AM session. It is considered a stronger level than a regular fair value gap and is often used as a key level for support or resistance. A regular fair value gap that forms exactly at 9:30 is not qualified as the first presenter fair value gap.

Why is the first presenter fair value gap important for trading?

The first presenter fair value gap is important because it acts as a strong key level that the market will often revisit multiple times, providing an opportunity for traders to enter trades. It's viewed as a more significant level compared to other fair value gaps and can be used for both entries and take profit targets.

What is the time frame for identifying the first presenter fair value gap?

The time frame for identifying the first presenter fair value gap starts at 9:30 AM when the market opens and lasts until the end of the AM session around 12 PM. Traders should look for the first fair value gap that occurs after 9:30 AM, excluding the one that forms exactly at 9:30.

How can a first presenter fair value gap be used in trading?

A first presenter fair value gap can be used in two main ways: as an entry point where price may retrace to support and move higher, or as a take profit target when price revisits the gap. It can also be used to identify key levels of support or resistance, depending on the market structure.

What is the significance of a fair value gap being referred to multiple times?

When a fair value gap is referred to multiple times, it indicates that the market sees it as an important level. Price may revisit the gap, either as support or resistance, confirming its strength and making it a potential point for entering or exiting a trade.

What does the term 'state of delivery' mean in trading?

The 'state of delivery' refers to the current market structure or the direction of the market. A change in the state of delivery indicates a shift in market behavior, such as a transition from a bullish to a bearish trend, or vice versa.

How do smart money concepts (SMG) tie into the first presenter fair value gap?

Smart money concepts (SMG) are closely related to the first presenter fair value gap because they help identify changes in market delivery and structure. For instance, an SMG pattern can signal when the market is about to reverse or when a fair value gap is likely to provide a strong entry or exit point.

What does the term 'support becomes resistance' mean in relation to fair value gaps?

The term 'support becomes resistance' refers to the market behavior where a level that previously acted as support (where price bounced higher) turns into resistance (where price struggles to move higher). This shift in role can happen after a fair value gap is broken, with the price retracing back to it and failing to push beyond it.

What role do liquidity targets play in fair value gap trading?

Liquidity targets play a crucial role in fair value gap trading because they represent areas where there is a concentration of stop-loss orders, pending orders, or large institutional orders. These targets often align with fair value gaps, making them key areas for price to revisit as it moves towards these liquidity pools.

How does the first presenter fair value gap relate to take profit targets?

The first presenter fair value gap can act as a take profit target because it is a key level that the market often revisits. Traders can set their take profit levels near the first presenter fair value gap, as the price may retrace towards it, offering an opportunity to exit the trade profitably.