you struggle with knowing which PD Ray

will actually hold and that's normal

because only a small amount of Traders
actually notice and today you will
become one of them I and these other
students you can see here have been in
the exact same position as you but this
I would argue changed a lot we're going
to go over three steps where every step
is a different PDR the first step is a
fair value area the Second Step we're
going to go over the fair value Gap the
third step is Swing points in the first
step fair value areas that's a gather
name for the following PD Rays order
block mitigation block and breaker block
now the usual method on how people find
the best order block or the best
mitigation block is they see all right
did it take liquidity did it come into a
previous PD Ray and I would argue that's
a good first step but it's quite basic
so that's not what we're going to pay
attention to today the first thing for
all three steps is focus on PD arrays
that are in the same lag as current
price action so what does that mean what
is a lag again a bullish lag is from a
swing low to a swing High the swing high
in a bullish lag is not that relevant as
in it does not have to be formed just
yet as long as there's a swing low with
a fair value Gap in it that creates a
lack so any PD for example this or block
is relevant to us because it it's in the
most recent lag that's the same for fair
value gaps so please don't pick out fair
value gaps like this one for example
that doesn't have anything to do with
current price action it's not in a
current lag of any price action right
there on the time frame that we are
looking at so that already filters out a
lot of the low probability PD Rays if
they're not in the most recent lag it's
not a relevant PD Ray and again that
defers on the time frame you are looking
at so make sure you start on the higher
time frame and then work your way down
as well all right now that we have that
out of the way the important thing comes
because PD Ray's holding is all based on
the retracement back into that PD aray
think of it like this when the market is
going higher we have someone pushing
price higher when the market wants to
then make a retracement to continue
higher or wants to fully go lower then
that will be seen by a push lower now
depending on how strong that push is
that will tell us if that PD Ray so the
bullish price action actually wants to
hold the stronger the push lower into
for example an order block the less
chance that order block has of holding
so what is a strong push higher or what
is a strong push lower in the market
well if the market is moving
aggressively and it's aggressively
moving higher for example then what does
the market create fair value gaps so the
market can't hide its intention it will
always leave behind a clue and those
Clues are fair value gaps that's the
true intention of price so the first
step for those fair value areas is we
want to recognize the fair value area so
in this case it's an order block right
there that's the order block and in this
case it's on the 4H hour time frame the
time frame here is important because if
on the same time frame we have a
potential fair value Gap going against
us right there into the order block then
that's something we need to know and
before going into the lower time frame
we want to get rid of that potential for
valap what does that mean well at this
moment in time we have this bearish
expansion phase candle lower which is
the second candle of the three candle
pattern of a fair value Gap right it's
always a three candle pattern first
candle does not matter second candle is
always an expansion phase candle meaning
the body is below in this case a bearish
REV Gap below the first candle low right
there creates the body of the potential
fair value Gap so what does the third
candle here need to do if we want to
avoid this fair value Gap from being
created well then ideally we want to see
that third candle trading back into that
first candle low because then that shows
to us we are not creating that fair
value Gap so it takes away that bearish
intention so that is ideally what we
want to see first before we go into the
lower time frame now if we move to the
next candle right there then what do we
we see we see that intention right now
has not been taken away so we have a new
bearish fair value Gap going into this
order block right there now why is this
so dangerous this long wick on the 4our
candle right there that could have been
an entry confirmation on the lower time
frame but if you only pay attention
right here to the lower time frame and
you don't pay attention to the 4-Hour
time frame in this case then you simply
have intention going against your trade
ID in the form of that fair value G
because if price right now wants to
continue lower where will it continue
lower from well there's only one option
and that is this fair value Gap sitting
right there so we might have a sting
into it and then we continue lower
losing the trade or hopefully taking a
break even right there but that's not
even a trade that we need to take right
there that could have been avoided by
simply waiting for that 4our Gap to be
disrespected because the first option is
that for Value Gap not being created
which we can see an example off right
here this order block right there we
trade back into that and we create a
potential fair value Gap so on the next
candle that third candle right there we
want to take away that expansion phase
and that will give us a good sign we
don't have that bearish intention and
what do we see we see right there that
fap does not get created on the bearish
side that is exactly when we can
comfortably go into the lower time frame
to confirm it then another example right
here with this order block that we see
we have a new retracement going back
into that or block we create a fair
value Gap right there so we do not take
away that value Gap okay not the best
sign so if we do manage to create a fvab
going against us then we want to see
that fvab getting disrespected an easy
way to approach this the highest
probability in my opinion is wait for it
to trade back into that fair value Gap
wait for it to ideally fill to create a
new bearish fair value Gap right there
continuing low and then wait for simply
set a new 4our F Gap right here
continuing higher so the important thing
right here is wait for that extra
confirmation the retracement and how
strong the retracement is determines how
much confirmation you are going to need
because think about it very logical the
stronger the push lower right there the
lower we are also going to trade into a
certain order block right there so the
more confirmation you ideally want to
not catch the wrong and the fake moves
higher so we can catch the actual right
move higher when we actually do want to
move higher step one done for step two
we move on to fair value gaps because in
Fair Value gaps it's a total different
story because this usually can already
be seen by the third candle now
understanding these F Val gaps will also
help you in understanding step one and
step three because they they all tie in
together so first think of that pushing
analogy again we first push higher
creating that expansion phase of a
certain fair value Gap and all of a
sudden the third candle pushes lower
very aggressively for example here on
Australian dollar US dollar we have this
expansion phase right there this is the
full potential fair value Gap so this is
the total area of the F Val Gap that can
be created now the third candle here can
do a lot of things right can be a
bullish up candle we can just simply
continue higher creating a breakaway gap
for example we can also create a
consolidation so consolidating third
candle does not move a lot but then the
third option is it creates a big down
candle or a big rejection on the top so
what does that look like well here we
see all of a sudden the full area that
we had right there the full gray box not
even half of it is remaining right there
creating relatively seen to what the
potential of that fair value Gap was a
quite a small area and that is because
the third candle right here is a big
rejection at the top right there pushing
all the way lower so if the third CLE of
a fair value Gap is a very big
retracement leaving behind a very small
fair value Gap then this means either
one of two things it is either not going
to hold or it's going to have a deeper
retracement into it so not just a sting
into it to then continue higher off of
it and in both those scenarios you would
want more confirmation because we know
it's most likely not going to be just a
sting into it to then simply continue
higher more confirmation when we talk
about these third candles off those F
gaps the simple way to go about that is
off of the daily F Gap just simply
require a new 4our F Gap higher right
there so go down one time frame on that
F Gap right there and then look for new
fair value gap on that time frame below
the original fair value Gap so here on
your screen is a list with the time
frame combinations we're here on the 4
Hour of the daily fap we can already see
it's not holding and we're pushing lower
right there another example of those Sur
gaps where it's not necessarily the
third candle right here but we do have
an aggressive move into it then here we
can simply use the same premise that we
used for those fair value areas right so
take away the potential Fair Val right
there trade back into that first candle
once we trade back into that perfect and
then you can line that up with the idea
as well of a 4our f Gap higher right
there to then potentially continue
higher off of that instead if you are
not certain if there's a lot of momentum
coming back into that F Gap with the
third candle then we have a simple
saying in the money-making team which is
whenever end out wait for a new fair
value Gap there's nothing wrong with a
little bit of extra confirmation but
there's a whole lot wrong with not not
requiring enough confirmation now we can
use the understanding of those F gaps in
The Next Step which is Step number three
step number three is about swing points
when I refer to a swing point it's a
swing high or a swing low so to
understand if a swing high or swing low
is holding we need to understand what a
sweep is a sweep of liquidity is seen
through two ways the first method is
through candle science candle science is
essentially paying attention to how a
singular candle is forming and what the
next candle can do based off of the
previous candle so candle science is how
we can know just purely based on one
candle if it's going to be a sweep or
not the way we want to go about that is
we want to Mark out the swing high on
the time frame that we are looking at so
this is a daily swing high right there
so we're going to look at Candle signs
on The Daily time frame and if we want
to look at a sweep on The Daily time
frame for the daily swing High then that
can be seen through Wicks so these Wicks
the both Wicks that we see right there
they indicate that we're actually
sweeping That Swing High when we do
return lower so a field to close above
those swing highs right there indicates
that we might have a sweep and that we
can actually look to continue lower
instead that is actually already the
first method on how you can see a sweep
now think of what is happening on the
lower time frame right there so time
frames below the daily because that is
the the second method the second method
is the exact same as candle science just
seen through different lenses just seen
through different time frames
essentially so if we want to look at it
from the same time frame as the swing
high right there then we use candle
signs the first method but the second
method right there if we want to go down
in time frames get more confirmation for
example then this Wick what is that on
the lower time frame well that long Wick
is the following it is fair value gaps
moving higher and fair value gaps moving
lower right there where bullish fair
value gaps are getting disrespected
because what is the whole video about
because we have bearish intention right
there coming into those bullish fair
value gaps so the intention is bearish
there's a lot of aggressive momentum
pushing lower which is simply seen
through a long Wick right there and the
push lower already so on the 4 Hour we
see the daily swing high right there we
push higher above it with 4our for gaps
after that we see bearish 4our for gaps
right there being created already tells
us all these F gaps right there in the
most recent lag they're not very high
probability so we would already want to
see more confirmation but when we then
start to respect those FV gaps and we
start to continue lower creating new FV
gaps that tells us hey I don't think
we're in for higher prices we might want
to continue lower actually because again
we talked about an order block not
holding we talked about a fair value Gap
potentially not holding we talked about
a swing High getting swept or actually
holding what does that all tell us that
tells us that we have context in our
trading meaning we have an idea of what
it wants to do if an order block is not
likely to hold well then we have an
advantage over someone else on what the
potential direction is of that market
price so here a lot of people might see
this fair value gice there but we see
that fair value Gap does not have a lot
of potential of holding and if it does
want to hold perfect the retracement is
going to be deeper and we might still
continue higher off of here but that
will be seen through 4our F gaps pushing
higher in the meantime if the 4our
supports the ID right there we can
actually look at shorts instead where
potentially when the 4our starts holding
we can look at this low right there as a
Target instead and see how that lines up
right there with as well step two the
understanding of the ver Gap if it's
likely going to hold and then when we
sweep that high and we have the third
candle being aggressive moving lower it
all starts clicking so in that daily F
right there if we go into the lower time
frame and we even go into the 15minute
time frame we see we have a few
rejections higher right there off the
daily Gap okay perfect afterwards we
start to push lower here we start to
create this swing high right there then
it's all fractal here now why do we not
trade this swing low right there
potentially holding to continue higher
the higher time frame premise right now
is to continue lower so always remember
that higher time frame rules going into
the one minute we can do the same thing
Fair Val guys pushing higher Fair Val
guys pushing lower right there below the
high that we just swept which is the
same thing if we want to confirm that on
the 50-minute time frame because this
pattern V is pushing higher V is pushing
lower is what leads to 15 minute just a
simple Wick right there Above That Swing
high and then eventually pushing lower
right there as well now before you go I
have very exciting news because after 6
months my own prop firm will finally
launch very soon so if you want to stay
up to date I would advise joining the
Discord Link in the description then
remember the retracement determines the
confirmation and how much confirmation
you're going to need and How likely it
is for certain PD Rays to hold all right
perfect thank you