this is going to be the only fair value Gap video that you guys need to watch in order to fully understand fair value gaps imbalances and inverse fair value gaps I'm going to be covering how to identify them how to use them on a chart and also when we can use them to actually take trades off of them obviously we need a lot of other confluences to actually take these trades but this is mainly just going to be going over imbalance as a whole which is fair value gaps imbalances and inverse fair value gaps so with that being said let's jump on the chart let's talk about how to identify them and then also make sure you guys stay to the end so that I can show you guys not only how to identify them but how to actually Place trades using this super great Confluence that I pretty much use every single day in order to place traits so let's pull up the chart before we even start doing anything with candlesticks or anything we're going to we're going to do a Picasso drawing okay so a fair value Gap and something that I like to do is I like to help people fully understand the Confluence so we want want to be able to not only be able to identify it but know why we're using it in the first place because we're just placing on a trade just saying like oh yeah this happened so I'm going to place a trade there's not much confidence in that me personally I like to have s like a crazy amount of confidence when I'm going into a trade and in order for me to have a crazy amount of confidence going into a trade I need to fully understand the Confluence that I'm taking that trade off of or else why the [ __ ] would I be confident in it I need to know why price is moving so first I'm going to show you guys how we can identify them I'm going to give you guys a little drawing of it and then we're going to go ahead and describe why price moves the way that it does off of these confluences and then we'll go into identifying them so a fair value Gap is a three Candlestick pattern okay we have one candle and then we have our expansion candle and then we have another candle so as we know anatomy of candlesticks we have boom this candle opened right here it had buy orders that push it up here and then sell orders push price down here and at one point in time price came down here at one point in time price price came up here sell orders ended up pushing price down and closing price out right here then following that we see a boom big move up so this Candlestick closes up here next this Candlestick opens right here at one point in time during this let's say this is this is on the hourly okay so during this hour hour price got up to this point price had sell orders down to this point and then buy orders push it back up and then price ended up closing here so this is a bullish fair value Gap or where even is the fair value Gap in the first place well we know that price had buy orders push it up here and then what happened sell orders were right here and caused price to push down okay and ended up stopping it right here then on top of that we had sell orders push price down and then buy orders bought it back up here so what do we know sell orders stop here and sell orders orders stop here so with that in mind what do we know sell orders stopped here and sell orders stopped here so what is there a lack of within this Gap there's a lack of sell orders so this is part of the reasoning behind this when we have this gap between the top Candlestick of the first candle and the bottom Candlestick of the third candle we can identify a price range where there's a lack of sell orders within the market that if the market retraces into it and we see buy orders filled within that price range where there's a lack of sell orders what can we assume about price price is more than likely going to proceed up especially if we're within an uptrend okay so that's a bullish fair value Gap why is it a bullish fair value Gap well first of all if we're in an uptrend and we see a price range where there's a lack of sell orders and price goes into the price range where there's a lack of sell orders and we see candlesticks moving up out of that confirming that buy orders have been filled then we can safely assume that price is going to move higher from there and on top of that why do we call these imbalances why do we call Fair Value gaps imbalances in the first place because it's imbalance price action we know that there's a lack of sell orders within years so what is going to cause price to balance itself out sell orders to push price down in here fill in this lack of sell orders and then from there we can get buy orders out of that and that's going to cause price to move higher and more often than not we see these imbalances get filled in order to balance out price action and I'm going to show you guys how you guys can identify order flow and how you guys can identify which fair value gaps are going to get filled and which ones are going to be filled more likely than others on the chart okay so I'm going to be explaining that later in the video so make sure you guys stay along for this next one we are going to be identifying a bearish fair value Gap bullish means up bearish means down for all the noobs okay so bearish fair value Gap we have boom and also keep in mind these three Candlestick patterns the first candle and the third candle it does not matter matter the color of them we don't see color we don't care if the candle is red green black [ __ ] Indian okay it doesn't matter it really doesn't matter the colors of these these these candlesticks the only color that matters the only discrimination that we do is on on the middle one okay so this one can be an Indian candle stick it doesn't matter okay it can be up down all around okay as long as this one is going down and as long as we make a gap within this is for bearish the bottom Wick of the first candle in the top Wick of the third candle then what do we know about this price range right here it's imbalance why because there's a lack of now buy orders within here so if price wants to come in and fill in this price range to balance out that price action to come into the imbalance price action where there's a lack of buy orders and then we see sell orders come out of that what is price more likely going to do it's probably going to continue down from there okay so that is our three Candlestick pattern okay we know that there's a lack of sell orders within a bullish for Value Gap we know that there's a lack of buy orders within a bearish for Value Gap cool cool cool cool cool again we don't care about the colors of the first Candlestick or the third Candlestick the only one that we care about is the middle Candlestick whether it's going up or whether it's going down now that's how we identify what a fair value Gap is what happens when we're trying to identify if there isn't a fair value Gap well it's super simple if the Wicks of the first Candlestick and the third Candlestick overlap then we know there's not an imbalance there so let's say this candlestick's got a huge Wick up and this candlestick's got a huge Wick down is there an imbalance within here no even though this Candlestick is freaking huge there's no imbalance within here why because we know that sell orders stopped all the way up here buy orders pushed it up and then sell orders were able to come in up here and push price down same thing here on this third Candlestick sell orders came down here so these sell orders are overlapping and now there's not a imbalance and there's not a price range where there's a lack of sell orders so in turn there's no imbalance same thing here on this bearish fair value Gap if we have buy orders sell orders push this down buy orders buy it back up buy orders push price up if we see something like this there's no imbalance there's no price range where there's an in where there's a lack of buy orders so in turn this is not a bearish for Value Gap if the Wicks of the first candle and the third candle are overlapping there's no fair value Gap they like just think think of the name it's a gap we can see the Gap boom it's right here gaping hole we want to plunge it okay so now that we know how to identify fair value gaps let's go ahead and look at them on the chart there's this is something that I need you guys to understand don't just watch up to this point in the video and be like boom tjr taught me how to do a fair value Gap I'm going to place a buy every time it comes into this fair value Gap and I'm going to be a qu trillionaire no Timmy you're actually going to be [ __ ] and homeless if you do that that okay we need to use a lot more confluences combined with this in order to be good at trading okay so this is just one of the confluences and later down the line maybe in like a week or so I'm going to make a full YouTube video going over my whole strategy on How I Look to take trades and it's going to be like [ __ ] three to four hours long going over all of this [ __ ] but we need to understand that we can't just be buying and selling every single time we come into a bullish or bearish for Gap we need a lot more confluences with that we need daily bias we need liquidity sweeps we need inverse for Value gaps we need break of structure we need order blocks breaker blocks all that good [ __ ] okay but this is just one piece of the puzzle so with that being said let's go ahead and identify it on the chart now like I said there's a whole bunch of these things and they're all over the chart so instantly we need to be like a [ __ ] tracker Jacker we need to be able to have Aimbot okay when I get on the chart instantly what am I seeing I'm seeing Boom bearish for Value Gap Boom bearish for Value Gap okay and then and then within here here what do we have boom bullish fair value Gap and then boom okay this is something that I need to explain to you let me get rid of all these other fair value gaps sorry I'm going a little bit too fast but that just shows how good I am at trading okay something I want you guys to understand this is probably the best analogy that I have ever made in in trading ever fair value gaps are like dicks size does not matter we can have the giri longest biggest fair value in the world and price will probably want it you know at the end of the day it's a big one we probably want that one right it's a big imbalance we want it but also a little guy a two incher even a microen it can do the job as long as we get in there it's we're making [ __ ] shake and we got to think from the woman's perspective a penis is just one piece of the puzzle a penis is just one adaptation to the full romantic embodiment of a man so we need to be thinking about not just the penis but we need to be thinking about what lies within the personality and that's the second piece of it what lies within a fair value Gap in imbalance what lies within a man personality so they're seeking not penuses they're seeking and yearning for human connection they're yearning for a personality that they can bond with and it's the same thing with fair value gaps when we get on to the Chart we know that the the chart it's not just seeking and looking for the biggest dick out there it's looking for that imbalance that's all it wants it just wants a connection so if we see a little guy versus a big guy we're not discriminating both of them can be filled they're both valid why because it's what lies within it's that personality it's that imbalance size does not matter okay so with that being said let's pull up this example here so let's look at this this little guy right here this is an imbalance why you guys are probably saying tjr you you're so dumb bro we want the Big Daddy we want we want Drake this is Drake okay we want Drake well bro what about little Timmy what about tjr this little guy can do the trick too and we saw we can see he did the trick this imbalance got filled and we saw bullish AR we saw bullish reaction off of it then again Drake comes and [ __ ] like just leaves a gaping hole in that [ __ ] but okay wow we're getting off track here way I'm getting distracted but you guys get the point size doesn't matter if even if it's the littlest fair value Gap it still matters okay so this is a good example of a bullish fair value Gap where is our three Candlestick pattern we have our first Candlestick where's the top Wick right here third Candlestick move up again the color we don't see color Okay the third candlesticks Wick is right here these two Wicks don't overlap we leave a bullish for Value Gap right here price comes in fills the bullish for Value Gap and we get a bullish reaction out of it obviously if we had went long off of this we like Drake's coming through and Swinging his [ __ ] on top of our forehead but again that's why we need several other confluences all we want to do right now is just be to be able to identify them so again where's our fair value Gap first candle second candle third candle these Wicks they don't overlap this is a bearish for Value Gap first candle second candle third candle this third candle doesn't even have a wick but it's still considered as a fair value Gap boom first candle boom this is a bearish fair value Gap let's Show an example of what a fair value Gap is not um okay let's see price right here we have first candle second candle third candle what do we see the top Wick of the first candle the bottom Wick of the third candle these two Wicks are overlapping this is not a fair value Gap okay it's pretty simple like we literally just see the gaps on the chart it's like bet fair value Gap bet is this a fair value Gap right here no no these Wicks they overlap first Wick third Wick overlaps this is this a fair value Gap right here no first Wick third Wick overlaps is this a fair value Gap right here yes first Wick third Wick doesn't overlap it's a fair value Gap but as we can see without context these things kind of [ __ ] suck again getting [ __ ] down okay we might have to move off from this but last analogy getting [ __ ] down without any personality or human interaction you're pretty much just like you're begging for an STD you're begging for a stop loss okay and that's pretty much what you're going to get if you're not seeking and understanding that there's more to an imbalance all right so now that we identified how to identify fair value gaps it's pretty simple we talked about how we can identify these let's talk about when we can use these and when they are best used so if you guys have seen that my previous videos on liquidity you guys are going to need to know what a liquidity sweep is so if you guys haven't seen those videos I highly recommend after this video because I want to cover make sure you guys aren't just jumping from idea to idea to go watch that so you guys can have this in your back pocket so the first thing that we need to be able to identify and help us to be able to use fair value gaps is understanding where the liquidity sweep is and where price is going okay I haven't really made a full video on how to understand daily bias I should and I will eventually there's a lot of trading videos that I need to make going into 2025 but essentially if we can see a liquidity sweep and then a break of structure the main thing that we want to identify is order flow so super easy if we can just see that we are in an uptrend awesome we know that this is bullish order flow if we can see that we're in a downtrend awesome then we can see that that is bearish order flow and more often than not the earlier we are into bullish or bearish order flow the higher Confluence and the more the more trust I have in Fair Value Gap so if we see a liquidity sweep and then boom we start forming bullish order flow and like we're Within the second like retracement that that's super solid like okay cool I'll be looking for a fair value gap for price to fill and then boom we can take trades off of that however if we're like all the way up here and it's like all right bro we've made one two three four five six seven freaking retracements at this point we probably shouldn't be looking to enter into Longs there one because prices already overextended but also we've probably already seeked out all of the other draws on liquidity that price was looking to take out within that bullish order flow in the first place same thing with bearish order flow boom if we sweep out liquidity the first the first retracement is always going to be ideal if we can find a fair value Gap within there especially if we break structure or get an inverse fair value gap which I'm going to talk to you guys about a little bit later in this video if we can get a liquidity sweep break of structure then get a fair value Gap to get filled oh my like boom we're we're going absolutely berserk okay and then we're looking to enter off of that and then second retracement awesome still cranking cranking my [ __ ] okay third retracement okay maybe a slow stroke maybe a slow stroke if we haven't taken out our full takeprofit yet maybe you know maybe we get a little bust but you know we're not trying to go too crazy if we've already taken out our full takeprofit there's no reason to even jork our [ __ ] okay because full take profit has been hit our bias has been completed for the day Okay cool so now let's show this I know that sounded crazy but let let's show this as an example within Market open and as you guys know most like my strategy is is pretty pretty simple and if you guys want to learn how I actually put everything together and if you guys want to get coached by me I have a full mentorship where I go over literally every single Confluence that I have ever talked about and [ __ ] that I haven't talked about on YouTube talking about order flow talking about liquidity sweeps talking about daily buys talking about fair value gaps talking about inverse fair value gaps talking about breaker blocks equilibrium order blocks all of that stuff and there's a link in the description for you guys to sign up to that if you guys want to learn more from me be mentored by me for literally like get on coaching calls with me and for me to be able to actually walk you step by step through this stuff unfortunately on YouTube videos I can just get a brief little understanding of what you guys may need but within the mentorship it's like you guys can literally tell me like help I don't understand this and then I can come in and I can fix it straight away so if you guys want to sign up to that or have the potential because this is an application process okay not everybody's going to be allowed to get in because we only want to take real people that are actually trying to do this there's going to be a link in the Des description so let's go ahead and talk about how we can actually start applying this so let's go into uh yesterday's price action wasn't the best let's look for let's look at Thursday's price action see if Thursday had a good fair value Gap setup so oh yes no Thursday did have a perfect F Gap setup so I'm not going to walk through like the full strategy the main thing that we want to look for is fair Ral gaps here and then after this I'm going to be talking about inverse Fair gaps so to keep it short we're going to speed run through the majority of my strategy okay Market opens liquidity sweep following that break of structure right here what do we see following the break of structure okay so we know if we get a liquidity sweep to the upside we're going to be looking for shorts to the downside and we get a break of structure so what like we got two of our steps in we see a liquidity sweep and then a break of bullish order flow into bearish order flow so that's that should be ringing in our heads like holy [ __ ] we should get ready to look for a dick o o holy [ __ ] we should get ready to look for a dick ready we're looking for Drake's [ __ ] on the chart okay because if we see a liquidity sweep break of structure we're looking for dicks okay and what do we have boom Drake is all over the chart we have one bearish for Value Gap here we have another bearish fair value Gap here okay again we take it from the first Wicks bottom candle down to the third Wicks top candle or sorry the first the first candle's bottom Wick to the third candle's top Wick when it's a bearish f value Gap okay then we have another one right here what do we see price do it comes in it fills that imbalance and then we see selling pressure out of it and then what do we see price do boom Royal [ __ ] Rumble to the downside and then price ends up going to seek out whatever a bunch of different draws on liquidity like right here come on bro whatever my magnet's tweaking but price ends up going all the way down to hit like literally a 1 to 2.8 reward ratio okay perfect example we also have had a perfect example of that on Thursday on ES so let's talk about that one as well and then we'll find a bullish example for fair value gaps as well so again similar situation Market opens liquidity sweep break of structure what are we doing we're looking for Drake okay we have this small one again the little ones matter too we have this small bearish for a value Gap right here then we have this bearish for a value Gap right here what do we see price comes in fills the bearish for Value Gap boom we get a little selloff okay short work and then what does price do it goes seeks out draws on liquidity down here okay and again this is just talking about fair value gaps there's a lot of other videos where I talk about how to set takee profits how to set stop losses and I also talk about that in the mentorship and obviously help you guys learn how to put all of these pieces together but today we're just talking about fair value gaps but we can see liquidity sweep break of structure this is the first retracement after we start forming bearish order flow on that break of structure this is a retrace Confluence okay what I like to call Fair Value gaps are continuation confluences why because when we're within an uptrend what are we looking for the trend to do it's looking to continue and how do we continue that Trend typically by filling in Fair Value gaps these are continuation confluences when price retraces more often than not it's going to fill a fair value Gap so these are continuation confluences okay now let's find a bullish example let's see if we can uh go back and let's look at at Wednesday's price action I think Wednesday was pretty bad price action oh I think NASDAQ had a good bullish setup on Tuesday if I remember correctly NASDAQ NASDAQ smoking on that gas pack oh wait no it wasn't a fair value Gap it was a order block okay let's look at Monday see if Monday had a good bullish example I want you guys to be able to get to this level like you see how I'm literally able to just scroll to the days that the [ __ ] happens on and I'm able to in ly identify whether we have an example of that or not like I want you guys to be soon to be at that level this has got to be one hell yeah there is one movie okay bullish example right here look at this [ __ ] look at it it's literally perfect okay hopefully you guys already see this if you guys don't it's okay Daddy's going to hold your hand okay what do we see liquidity sweep okay liquidity sweep break of structure then what are we looking for continuation Confluence where's our fair value Gap oh my God for Value Gap boom gets filled ball run [ __ ] to the upside okay I literally took this trade on Wednesday liquidity sweep break of structure retrace into the fair value Gap boom rip stick to the upside they're easily going to be able to catch trades off of this I would go to NASDAQ I know it was the same exact setup let's try and find one more bullish setup let's see Tuesday nope Tuesday did not have anything let's go to Monday Monday looks like there was high impact news yeah if we don't have anything on here then I'll just go straight into inverse value G okay yeah not worth it okay cool but anyways you guys get how we're supposed to use these okay we're looking for three Candlestick pattern we're mainly going to be looking for liquidity sweep break of structure following that fair value Gap pull out the sniper take the [ __ ] shot Bull Run [ __ ] or bare cycle [ __ ] okay now let's talk about inverse fair value gaps so inverse fair value gaps are different than fair value gaps because we're actually not really looking for these to get filled and they give us like a different perspective on where price is going to go and what price is going to do so what I like to say is fair value gaps are continuation continuation confluence es inverse fair value gaps are confirmation confluences and are equal to break of structure okay so inverse for Value gaps in my eyes are equal to break of structure now why is that so the first thing that we need to do to understand inverse fair value gaps is understand fair value gaps luckily we just talked about fair value gaps we fully understand these now what do we know about fair value gaps well like I was saying they are continuation confluences so when fair value gaps get filled and then price moves up because of them like that shows bullish order flow being maintained and then the same thing to the downside it shows bearish order flow being maintained but what happens if we disrespect a fair value Gap okay what happens if we inverse a fair value Gap so let's say we have a move up right here move down we fill this fair value Gap and then we move up we come down we fill this fair value Gap we move up and then we have another fair value Gap right here but then uh-oh price closes underneath that fair value Gap pretty much disrespecting this fair value Gap right here well because we know fair value gaps are used to identify continuations in uptrends and continuations in downtrends if we see this price range that is supposed to be respected while within an uptrend get disrespected what can we start start crafting in our heads what can we start thinking about okay this uptrend might be over and more often than not it ends up being over and that's what actually ends up making a inverse fair value Gap so let's say we have a fair value Gap right here and we are within an uptrend and then price comes down and closes underneath this bullish fair value Gap to me that is showing that we are disrespecting the bullish order flow because if bullish order flow wanted to be maintained it would have just filled this and continued higher but price didn't do that so it's disrespecting bullish order flow so then once we see the inverse fair value Gap then what can we look in the other direction just like how we look for liquidity sweep break of structure fair value Gap now we can also look for liquidity sweep and or break of structure or inverse fair value Gap so inverse value gaps are essentially equal to break of structure and me personally I just use which whichever comes first So within this we have this bullish Sur value Gap that gets closed underneath so now I I say okay we just broke structure to the downside even if we don't close underneath a low if we inverse a fair value Gap that's supposed to be respected to the upside I'm going to be looking for bearish fair value gaps now to potentially get filled to continue the trend down because we just disrespected bullish order flow that's why order flow is so important I and I'll make a video on this later in the future but that explains inverse fair value gaps and I think the best way to show you guys this is just to show it to you guys on the chart okay and there was a perfect example that we went over on Thursday so let's go back to Thursday the setup is the exact same so we have a liquidity sweep and this is the power of fair value gaps because they can go in either direction we have this bullish fair value Gap right here yeah price comes in but we don't see any buy pressure out of it and then what happens this candle Sit Close closes underneath it so that ends up inversing this fair value Gap so that tells us bullish order flow is now no longer being maintained so even if we didn't break structure here which we did even if we didn't break structure here if we just saw this fair value Gap get disrespected I would be willing to start looking for a bearish fair value Gap to get filled because I know that this fair value Gap should have gotten filled and should have moved price higher what do we see inverse fair value Gap this new bearish fair value Gap gets filled and then price ends up going lower something that a lot of people like doing is they like saying hey inverse fair value gaps need to be filled [ __ ] no they don't inverse fair value gaps do not need to be filled at all inverse fair value gaps are one thing they are not fair value gaps once they have been inverse and once they have been disrespected how do we know a fair value Gap has been disrespected when we have a gap whether it's bullish or bearish and we close either above or below it so if this is a bullish fair value Gap and we see a candle that closes is underneath the bullish fair value Gap that has then turned into an inverse fair value Gap and that bullish fair value Gap has been disrespected same thing to the downside if we see a bearish fair value Gap right here and we see a candle close above it that bearish fair value Gap has now been invalidated and now that is is an inverse fair value Gap that is telling us that hey price will likely move higher from here now this is a little tip that a lot of people get confused when they're talking and learning about fair value gaps and something that I feel like I should share with you guys let me go to a uh a different example here a lot of people ask hey tjr when we have a bunch of fair value gaps stacked on top of each other what do we do well first of all we want to be able to identify all of them so we have this fair value Gap right here one and then we have another one right here and then let's say we even form another one down here what happens if we inverse this fair value Gap but we have another one above it will this say will we be looking for boom reverse from that no within a stack of fair value gaps in order for me to classify it as an inverse for Value Gap so we have one Gap here another Gap here all stacked up right and I need to show you guys an example of this where it it doesn't apply but essentially we have one Gap here and then the very next the very next three candle pattern another Gap here for me to be able to say okay price has inversed these gaps and I'm looking to classify this as a break of structure and I'm looking for price to move to the upside we have to understand if we close Above This price still can be maintaining bullish order flow because it could just fill this and then move lower it could just be looking to fill this fair value Gap and then move lower right so when I'm looking to look for an inverse fair value Gap if there's multiple stacked on top of each other like this I need the top one or in the bullish scenario I need the bottom one to be inversed so let me find a bullish scenario of this example same thing here so like look we have this bearish fair value Gap just because we closed above it right here doesn't matter because we have all of these fair value gaps just stacked on top of each other on top of each other on top of each other and the only time that we end up getting a real true inverse for Value Gap is when this very top one gets inverse off this C Candlestick right here so yes this one gets inverse yes this one gets inverse but since all of these are stacked up on top of each other without a retrace in between that's a huge emphasis on that without a retrace in between we have to wait for this one okay we have to get wait for this one to get inverse and at that point we might as well just look for a break of structure and we ended up breaking structure right here okay so let me find an example of the bullish scenario of this let's look for a a bunch of bullish fair value gaps okay so this is a good example we have this bullish fair value Gap right here we see that price closed underneath it but what was it trying to do do we instantly want to look for shorts off of that no because we have another bullish fair value Gap right here that price was actually looking to fill before wanting to move higher so that's why we always need to be looking at the last fair value Gap within the stack and actually this one would be the last fair value Gap within the stack okay um Let me let me give you guys another example and another tip that is super important for fair value gaps I know this video is long but it's super helpful next thing that we need to know about fair value gaps okay we need to know about balanced price action and where price has been balanced and understanding what fair value gaps are going to get filled versus which ones are not going to get filled and which ones we can disregard this is super important so stick with me whenever we are in an uptrend or a downtrend once we get a retrace and and then let me just draw this out so if we're in an uptrend right and we see price retrace into a fair value Gap fill it and then move past this High we have balanced all price action from this low and under now all price action from this low and underneath is fully balanced out so we do not care about a order block down here we do not care about a fair value gap down here we do not care about a breaker block down here because price has already pushed past this high and continued the uptrend following that when price comes down if we have a fair value Gap right here and it gets filled and then we push past this High even if we have a fair value Gap right here that did not get filled because we pushed past this high and we continued the uptrend all price underneath this low has been balanced out so we no longer care about this fair value Gap we no longer care about the other fair value gaps that are down here we don't care about anything from Price underneath this within this uptrend because we pushed past this high and we've continued the uptrend so if we push up and then we have a fair value Gap here and then a fair value Gap here let's say we push down past this fair value Gap and then end up filling this fair value Gap and then pushing up past this high now even if we have a fair value Gap here we don't care about it we only care about price from here and above now once we push past this High same thing in a downtrend and I'm going to show you guys this on the chart and you guys will understand it a little bit better downtrend so let's say boom we break structure we fill a fair value Gap right here let's say we have another fair value Gap up here but it doesn't matter this fair value Gap gets filled we no longer care about this fair value Gap that didn't get filled why because we took out this low and we're continuing the downtrend okay so we filled this fair value Gap we push past this low we no longer care about anything any confluences Above This high price comes down let's say there's a little fair value Gap right here and there's like three more fair value gaps all up here we fill this fair value Gap and then we push past this low we no longer care about any of these fair value gaps up here why because we pushed past this low and we continued the downtrend okay let me show you guys this on the chart now so you guys can get a better picture and better idea of this let me go to that what was it it was Wednesday this one yeah Okay cool so uh I mean this whatever but we can we can understand the point of this so again we see the liquidity sweep we see the break of structure we have this fair value Gap it gets filled and then after this fair value Gap gets filled I know we can't see the high but on like the one minute we push past this High here once this fair value Gap gets filled we no longer care we have this order block right here even though it got filled we don't care about it anymore we have this breaker block that got filled we don't care about it anymore everything from this low and underneath we no longer care about those confluences now this is like mainly applicable for like a bunch of fair value Gap stacks on top of each other so I just want to find a good example of that so I can uh I can show this well let me use this this stack of fair value gaps for an example so we have this fair value Gap right here and then this fair value Gap right here so we have two fair value gaps stacked up on top of each other let's say price opens on Sunday and we come up we fill this imbalance and then we come down and we take out this low now even though there is this Gap up here we no longer care about it why because we have continued the downtrend we have filled an imbalance and we have pushed past this low so now the only confluences that we're looking for if we see price retracing we should not be we should never never be thinking okay we're going to come up and fill this fair value Gap no [ __ ] no we're going to be looking for confluences within this leg down why because this leg down is the one that took out this low and now we're looking because think about it think about how Trends work they move up they fill a Confluence and then they move down and once they take out a low they're going to move up again and they never push past these highs or else that will be a break of structure and then the then the trend will change right so we're now only going to be looking for confluences Within here whether there's like multiple fair value gaps within here cool we see a fair value Gap it gets filled then we push underneath this low now we don't care about if there's a fair value Gap up here if there's an order Block Breaker block we don't care about it because we filled this fair value Gap and then we took out this low and we continued the downtrend now this the reason why I brought this up is not only for fair value gaps but also for inverse fair value gaps so if we come through we fill this fair value Gap this bearish fair value Gap and then we come down and we take out this low now we have this bearish fair value Gap right here or let's just say we form a bearish fair value Gap right here a bearish fair value Gap right here if we're looking for a bearish fair value Gap and we haven't made a retracement yet which fair value Gap are we going to have to wait for in order for us to inverse this downtrend or get an inverse fair value Gap are we going to have to wait for this one no now I know what you're probably saying I thought you said if it's stacked up yes if it's stacked up within the same leg down so when we get a retrace it pretty much resets the fair value Gap cycle so we come come up we fill this fair value Gap then we get a move down now we have two fair value gaps so in order for me to see an inverse fair value Gap or for me to inverse and look for a trend reversal I'm going to need to see this fair value Gap to get inversed why because we haven't made a retracement yet okay but I don't need to wait for this one I just need to wait for the top one within this leg down now let's say we come up we fill in this imbalance and then boom we push past this leg and then we form another imbalance right here and there's only one which fair value Gap am I going to have to wait for for me to see an inverse for Value gap for me to want to look for Longs or for me to want to look for now a bullish fair value Gap to take longs to the upside am I going to have to wait for this one because it's stacked up no why because we already filled a fair value Gap and then moves moved past a new low so now we already have a new leg down that we're considering so if we inverse this I'm not going to have to wait for this fair value Gap to get inverse I'm not going to have to wait for this fair value Gap to get inverse why because price from this move up and then down everything Above This High has already been balanced out even though there's this fair value Gap here we no longer care about it then from here even though we have this fair value Gap here everything from this high and above has been balanced out so we no longer care about that but everything from this high and Below hasn't been balanced out yet so we do care about these fair value gaps so if we end up inversing this then we do care about it and say Okay order flow is probably going to change to the upside then from the there we can look for bullish fair value gaps to get filled to then look for Longs let me show you guys an example of this on the chart and again if this is confusing I completely understand but I'm really trying to put this [ __ ] together for you guys we're going like we're going really deep into this and hopefully this is starting to make sense for you so let's Show an example of let's show the inverse fair value Gap example okay this is a perfect example actually no it's not because the fair value Gap wasn't fil okay this is like a semi example but there's not an inverse per value yet but if this makes sense to you guys so within this 5minute trend down we're in a downtrend right we end up taking out this low then we get a retracement yes we don't fill these fair value gaps but what do we end up doing even though we didn't fill these fair value gaps these fair value gaps that are stacked on top of each other what do we end up doing this was the new low that was formed we get a little retrace up and then boom we take out this new low so now we don't care about these fair value gaps that are above this High why because price already moved up and then took out this low continuing the downtrend so now even though there's no confluences within here to be able to push price down further price from this high and above we don't care about it we're not looking for price to retrace into these fair value gaps then continue down why because we already retraced and then we already took out this low showing that this downtrend should continue so when we get this break of structure to the upside on this Candlestick right here some people might be like well we still have this bearish for Value Gap we might be able to go lower no because we already broke structure to the upside and we already established that everything Above This High we no longer care about why because it took out this low on the downtrend so this inverse for Value Gap we or this for Value Gap we don't care about this for Value Gap we don't care about we only care about the break of structure then literally oh it's right in front of your faces we get a break of structure then what boom bullish for Value Gap right here sorry I'm spazzing bullish for Value Gap right here fills boom price Bull Run [ __ ] [ __ ] it goes higher yes are you seeing it now hopefully you are let me let me find a better example of this um so we can try and put this together I want to find a good example of like uh imbalances okay this is another good example unfortunately there's no inverse for Value Gap but look here okay so we're within an up Trend this is at a like a random ass time okay so again we don't have all of our confluences we don't have like liquidity sweep breaking structure whatever but I just want to show you guys this for context we have a bullish fair value Gap right here we have a bullish fair value Gap right here price comes down fills this bullish fair value Gap and then what does it do it continues the uptrend by taking out this high so now we no longer care about this bullish for Value Gap why because we already showed and confirmed that everything that from this low and Below we shouldn't care about because it filled this fair value Gap and then ended up continuing the trend by taking taking out this High cool so when price ends up breaking 5 minute structure right here to the downside we shouldn't be worried about this fair value Gap right here needing or getting filled to then move up higher why because we already established that this move down and then up balanced out price action from here and everything below it okay now obviously we don't know the overall trend we don't know the overall bias so this is kind of taken out of context but that's another good example I want to find an example with an inverse fair value Gap oh this is yes I finally found one okay so again this is at a random time it's during London session but this is like the one example that I was able to find So currently right here on the 5 minute time frame we're within a downtrend right obviously we're going to want to wait for like liquidity s break INF structure and at the right time dur during New York session all of these things but let's just use this example here so we know that price came up and it filled this fair value Gap and then moved down and took out this low and on top of that we also have fair value gaps right here we also have a fair value Gap up here okay this fair value Gap and this fair value Gap they haven't been filled yet but after we'll start it from all the way up here we come down then we get a retracement up and we don't even fill this for Value Gap why can we disregard it or when can we disregard it once we take out this low and continue the downtrend once we take out this low we can say every everything from this high and above we don't care about those confluences anymore why because we continued the downtrend underneath this low so now we know we can literally remove this fair value Gap we should never think about it again literally never think about it again because it's only applicable within this downtrend in this downtrend we showed that hey we balanced out price action and now we're continuing it so we shouldn't care about this it should no longer be marked out we can fully forget it then following that on this leg down we have boom fair value Gap here fair value Gap here we price form a low right here we push up we only fill this fair value Gap and then what happens we continue the downtrend by taking out this low so what do we do we no longer care about this fa value Gap and we no longer care about any confluences from this high and higher so we don't care about this fair value Gap we don't care about this fair value Gap we don't care about any of those now what fair value gaps are we considering we were not even considering this one anymore because it's been filled price action has been balanced because we took out this now we are going to see the power of an inverse for Value Gap that happens before a break of structure finally I was able to find an example because we took out this low we have this bearish imbalance we are expecting price to fill this bearish imbalance and then move lower and we know that if price pushes past this bearish imbalance and disrespects it there's no other confluences that we're looking to consider up here why because prior to that price has already balanced out those legs why because it took out those lows so we don't care about this fair value again because price even if price is moving up it's not going to it's not going to do anything off of that it's going to be off of a different Confluence on a different time frame we don't care about that anymore so once we see this candle disrespect this fair value Gap awesome that's when when we could say boom the trend has changed we're going to end up moving higher now obviously and unfortunately in this example this is at a random ass time during like going into London session coming in a New York session so price is going to be moving weird but using this at the right time and in the right right place is just it's it it works like a freaking charm let's see here I think this might actually be a good example too okay this is perfect this is another example within this leg up what are we in we're in an uptrend and since we know we retrace down and then we took out this High we can disregard every single Confluence that's under this low right luckily there's there's not really any confluences underneath this low but we're only considering the fair value gaps within this extension up now or the confluences within this extension up so what do we have we have a fair value Gap right here and then we also have a fair value Gap right here the tiniest one but again Size Doesn't Matter on this down candle right here we end up breaking structure too but just for example purposes this down candle right here what do we get we inverse both these fair value gaps so boom we know that we should be looking for shorts now then following that what does price do it comes up and it fills in this bearish for Value Gap and then ends up continuing lower boom price ends up rumbling on down taking out this draw in liquidity so to recap fair value gaps are imbalanced price action that are used as continuation confluences within uptrends and downtrends inverse fair value gaps are used as confirmation confluences that we are confirming that price is disrespecting current order flow and will more than likely reverse the current Trend that we are in and again there's a reason why it's fair value gaps and inverse fair value gaps fair value gaps are showing us that hey we are continuing the trend inverse fair value gaps are showing us that hey we are going against the trend okay and we're probably going to reverse hopefully you guys learned a lot from this video hopefully you guys can take this and apply this within your own trading I know this was a long video but hey man I had to get all this [ __ ] off my chest hopefully you guys learned more about order flow hopefully you guys learned more about fair value gaps and inverse fa value gaps when to use them when to not use them which ones you guys can learn to identify and which ones not to I appreciate you guys I'll catch you guys in the next one peace out