The document discusses the concept of fair value gaps (FVG) in financial markets and provides guidance on how to properly utilize them. Some key points include:
1) FVGs are identified by noting the body of a candlestick that has not been violated by previous or following wicks, representing an imbalanced area where inefficient price action occurs.
2) Entries within an FVG must align with the current market structure trend and liquidity levels.
3) FVGs that are trading at a premium or discount are not suitable for entries, as market makers are entering positions at cheaper prices.
4) Watch for price rebalancing of an FVG but failing to break the overall structure,
The document discusses the concept of fair value gaps (FVG) in financial markets and provides guidance on how to properly utilize them. Some key points include:
1) FVGs are identified by noting the body of a candlestick that has not been violated by previous or following wicks, representing an imbalanced area where inefficient price action occurs.
2) Entries within an FVG must align with the current market structure trend and liquidity levels.
3) FVGs that are trading at a premium or discount are not suitable for entries, as market makers are entering positions at cheaper prices.
4) Watch for price rebalancing of an FVG but failing to break the overall structure,
The document discusses the concept of fair value gaps (FVG) in financial markets and provides guidance on how to properly utilize them. Some key points include:
1) FVGs are identified by noting the body of a candlestick that has not been violated by previous or following wicks, representing an imbalanced area where inefficient price action occurs.
2) Entries within an FVG must align with the current market structure trend and liquidity levels.
3) FVGs that are trading at a premium or discount are not suitable for entries, as market makers are entering positions at cheaper prices.
4) Watch for price rebalancing of an FVG but failing to break the overall structure,
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Fair Value Gap | #ICT
How to utilize FVG properly:
$ES_F $NQ_F
FVG | Explained
Identified by noting the body of a candle stick
which has not been violated by the previous and following wicks
Acts as an imbalanced area where inefficient price
action takes place and can be used as both entries on retracements or targets as a draw on price Misconceptions
Many are drawn to FVG as they are a simple
concept at face value, however not all hold the same amount of significance
Understand that FVG are simply a vehicle to get
entries on a trade, ONLY when external factors line up with the context of its placement Market Structure
Entries within a FVG must be in confluence with
the current structure of the market
When market structure holds bullish, watch entries
on the long side. When market structure holds bearish, watch entries on the short side Draw on Liquidity
Avoid going long in a FVG before sellside liquidity
is ran and avoid going short before buyside liquidity is ran
Price is meant to deliver liquidity in order for
positions to be unloaded. Noting where liquidity is purged hints at directional price delivery Premium | Discount
The market is always seeking discounted prices.
Any FVG which is trading within a premium on the long or short side are not considered for entries
Market makers are entering their positions cheap
and so should you Rebalancing | Failed Price Swing
Imagine imbalances in price as gap fills in equity
markets. Price is constantly looking to fill or “rebalance” existing FVG
Watch for price to rebalance a FVG, but fail to
break structure. This is a signal that price wants to seek continuation Complete Setup
Once you identify each element, you will have
narrowed multiple fair value gaps within a trading range to a single one which holds the significance on price
Check off each step and find your entries hold
greater value Part 1 - Extension of this thread:
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