YouTube Transcript:
Boot Camp Day 16: FVG Pt_ 2

foreign
guys welcome I'm sorry for the late
video hopefully some of you guys are
still awake if not I'm sorry this is
coming to you guys late
um I have had zero hours of sleep
um I'm in Miami obviously
um and I'm still going to keep my
promise of uploading a video every
single day I wish I could take a nap
right now but I'm not going to let
myself do that because you guys have
to learn and
that's what we're here for so with that
being said let's just jump right on into
it okay I believe today hold on actually
I I don't want to get this wrong
I believe today is fair value gaps part
two
let me double check the the YouTube
channel for a second
yes let's go okay today is
um is identify or sorry fair value gaps
part two okay so today we're going to be
talking about how we can identify them
um and then also you know like showing
how you could potentially take a trade
or really today's just going to be
identifying and then day three is going
to be how you can take trades and how
you can put it together with liquidity
sweep breaker structure Bing Bong boom
all that stuff today is literally just
going to be identifying them
understanding what they're used for
doing a little bit recap of that
um should be relatively quick should be
relatively easy so um with that being
said let's jump right into it so we'll
first do a quick little summary also
please forgive me if I you know mess up
like I I literally I've gone
almost like 48 hours with no sleep
um and obviously my voice is gone and
I've been doing a bunch of stuff so if I
if I mess up bear with me anyways
um uh what was that what was it yeah
let's let's jump right into it okay so
first we'll do a quick little recap what
are fair value gaps what are liquidity
voids what are imbalances it's literally
where there is a lack of liquidity
meaning there are no resting orders in
the opposite in the opposite direction
of wherever price wants to go so with
that being said right price comes down
into that liquidity void into that
imbalance into that for Value Gap where
there are no right resisting orders and
then we can place more orders but Market
is going to move and Market is going to
react why because there was a lack of
liquidity within that area that gives us
the opportunity and the ability to you
know take a
take uh sorry move the market oh I can't
dude I'm sorry
um messing up but more focused all right
so with that being said right we
understand that okay fair value gaps are
essentially a liquidity void within the
market where Market will probably draw
to and then react off of in that
essentially what it is it's literally
just an imbalance a liquidity void price
draws back down into that why because
there's no resting sell orders there's
no resting buy orders in the opposite
direction of wherever the price is
trending which in turn makes fair value
gaps a retracement
um a retracement tool essentially it
helps you find trades off of
retracements and as we start getting
deeper into this we'll start explaining
you know all that about how you can
um how you can you know use these but
something to note
fair value gaps are not reversals fair
value gaps are not used for reversals so
if we see Market trending higher and
higher
if we see Market going higher higher
higher higher right breaking higher
highs and higher lows
we see market doing that
we are looking for fair value yet we are
looking for bullish fair value gaps okay
and we'll talk about where to find them
but in this case right we're bullish so
what are we looking for we're not
looking for bears for Value gaps to turn
price around we're looking for
retracements into these bullish for
Value gaps for reactions
okay and continuations that's
essentially what this what fair value
gaps and equilibrium are used for it's
continuations and retracements okay so
with that being said now let's talk
about how we can identify them fair
value gaps are essentially or imbalances
are essentially a three candle pattern
the first candle okay which looks like
this shrink okay and then the second
candle which is the candle that creates
the imbalance essentially
will be like super full like this and
then the third candle which
looks a little something like this okay
and
a fair value Gap looks something like
this
okay so what is the area of fair value
what is the area that has not been
filled right that didn't have any you
know
um resistance um resting orders right we
see this right and we'll show examples
of this on the chart but we see this
candle right massive up candle right and
no resistance in between and and how do
we know there's no resistance through
the Wicks okay so this is a three candle
pattern and essentially we find the
liquidity void we find the you know area
and price range of fair value by
measuring it off of in in for for
bullish fair value gaps it's from the
top
of the first candle's wig to the bottom
of the third candle's Wick and then you
know you draw your box or whatever your
Gan box
your rectangle
you draw it right just like that boom
from here up to there wait for price to
fill wait for price to react so now my
shitty ass drawings can get removed and
we can actually see this happening on
the charts and you know like actually
see what it looks like so this is a
perfect example okay we get a breaker
structure we're confirmed bullish now
okay we know that we're bullish okay
what is this we have a massive candle
with no right look this no Wicks no
Wicks filling this so what does that
make this a fair value Gap right there
is a liquidity void what does price do
draw into it chop chop chop break
structure rally okay perfect example for
Value Gap getting used boom bullish
right bullish for Value Gap rally okay
it's actually very easy to spot these in
the market you literally just look for
you know areas that do not have do not
have Wicks covering in that covering it
so for this one for example
[Music]
sorry this one for example we have boom
right from a bearish gap we have it from
the bottom of the first candles Wicks to
the top of the third candle's Wick like
this right we can see boom bottom of
this candle's wig to the top of this
candle's wig we see price come in chop
chop chop fill drop
okay right how do we know it's going to
be bearish we had a breakup structure
right here confirming a bear's bias what
were you looking for we're looking for
retracements okay we retrace onto this
into this fair value Gap we continue
lower
this is as easy as it gets this should
be one of the easiest Concepts to to use
however because it is such a freaking
easy concept to use
you have to understand that it is it
isn't necessarily
as valuable as you may think okay so
you you can you can find these literally
every single every everywhere on charts
right we could you know oh for Valley
Gap right here we have her value Gap
right here we have everybody Gap
right here right and the issue that I
have with this is when people execute
purely off of just the fair value Gap
getting hit and without a reaction wait
for a reaction or scale down to a lower
time frame see a breaker structure see a
change in Market structure shift or just
a reaction like with a bullish candle or
a bearish candle whatever Direction
you're trying to see it go and let that
be your confirmation to enter okay be
very patient with these because they're
all over the chart and it's really easy
to get kind of caught up in them and be
like oh they're probably got pair if I
probably got pair all these are going to
work and it's like no they aren't okay
they not all of them are going to work
and that's why we have to wait for
confirmation that's why we have to wait
to see if there's a reaction that's why
we wait to see on a smaller smaller time
frame if there's a break of structure
make sense
cool
um
I don't really I'm trying to think what
what else we have I mean today's
homework you are going to be going on
whatever pair you choose right whatever
one pair that you're going to be trading
on
um and you are going to be
you are going to be
um identifying 10 fair value gaps within
the market and then you know creating
kind of like a
hypothetical way that you would trade it
right so like this we see that breaker
structure the downside we know that
price is falling okay yeah we have this
fair value Gap within here
right we have this for Valley Gap we see
price fill close bearish right here okay
perfect now we can enter a stop above
the previous High Target previous lows
right simple as that but again we're not
even we're not even at the point of of
being able to execute yeah we're still
putting the pieces together so that's
really all
fair value gaps are and it's it's a
three candle pattern the first candle
okay the first candles Wicks do not
match or do not fill the second candle's
body and the first and third candles
Wicks do not fill
the second candle's body so let's say
this is the body
if we have
Wick from this candle and then Wick from
this candle let's just say these are
candles
okay there we go boom this is not a fair
value app why because price already came
within here
filled the liquidity void
right there's nothing else to do in here
and and these Wicks show hindering
orders these these Wicks show resting
orders
pretty much proving that
um you know this pretty much proving
that okay there's there's no lack of
liquidity here it's been filled so
that's something that I want you guys to
do as well be able to know where there's
no fair value Gap is this a fair value
Gap no why because we're looking
for a bullish for Value Gap we take it
from the top Wick the top Wick of the
first candle okay to the bottom Wick of
the
to the bottom Wick of the third candle
in terms of a bullish order blog look
this oh sorry bullish um fair value yep
look this is this is not a fair value
Gap because we took it from
this the high of this Wick down to the
low of this week and nope is not gonna
work definitely not gonna work okay so
with that being said I understand and
know the difference between ones that
are not real you know you should easily
be able to identify these right we just
showed it perfectly remember it's a
three candles pattern we're using the
Wicks of the first candle along with the
third candle and we're using the second
candle to pretty much show
the imbalance right we have this candle
this is a perfect example this candle
this candle is candle number one we take
it from the bottom Wick in terms of a
bearish fair value Gap we take it from
the bottom Wick right which is right
here down to the third candle's top Wick
which is right here okay the second
candle is the imbalance okay perfect we
see price rally up on in there
scale down to the lower time frame boom
you see breaking structure Young Money
militia
that's how we can execute okay so with
that being said get your homework done
make sure you identify these and then
also be able to identify the ones that
are not even real so you can actually
get comfortable with understanding you
know which ones are right and which ones
are wrong oh man yeah that's pretty much
it um I'll see you guys tomorrow for a
nice little psychology Zoom
um I'm really excited for it peace out
um also hopefully I can get some good
night's sleep before the next video that
goes up tomorrow okay