Alright, this is attempt number two to make this video. We are currently in Miami right now and I recorded this out on the balcony but my computer overheated. So this is going to be take two and probably a sloppier version of it.
But what's good, Jits? Welcome to fucking bootcamp day... I don't even know, 16 or 15? Maybe 4?
I have no clue what day it is. um but yeah we're in this i think we're we tapped what like uh we've tapped two weeks now right um but anyways today we're talking about fair value gaps um liquidity voids imbalances whatever you guys want to call them in the market and most of time we would do this on like a little chart But as you guys know how we've been setting like this whole shit up for, you know, this boot camp. I'm pretty much going to split up all those little building blocks into three separate videos. Just so you guys have like a chance to take everything in and like actually properly understand. understand the shit.
So today it's literally just going to be one-on-one me explaining what fair value gaps are, why we want to use them, how we can understand them in the market to, you know, actually be confident in taking a trade based off of it. Because for me, I would much rather, you know, have a, a take a trade based off of actual like market confluence and orders being filled and actually seeing that versus, oh, it bounced off a floor or like it hit a ceiling. So it's going to go down like are we being dead ass about that off of a drawing that you put on chart You know, like I have no hate towards support resistance traders It just doesn't make sense to me why you would you know, essentially bet on something like that But I mean, hey some people make money doing it.
This just makes more sense to me It makes me feel safer about putting money into the market. So That being said let's get into a fair value gaps part fucking one boys So what is a fair value gap? What's a liquidity void?
What's an imbalance? literally all of those are pretty much the same thing so i like to call it just a liquidity void so similar to how we talked about liquidity in those past three trading videos that's where you know orders are residing that's where market wants to target to take out those orders to execute those orders at this certain price point this is quite literally the opposite this is a void a price range where there are no no contradicting orders so if we see a big move up right why are we seeing that move move up in the first place because there's no sell orders through that price range. That's the liquidity void.
That's the imbalance. That's the fair value gap. Same thing to the downside, right? If we see a big drop to the downside with no hesitation and it just dumps, that's a liquidity void. That's the imbalance.
And why is it a liquidity void? Because there's literally no resting buy orders throughout that massive drop down. If there were resting buy orders, price would go down, pull up a little bit, go down a little bit more. Yes, maybe it's bearish and it's still...
close is bearish but there's still rest and buy orders so this is what it helps us do we can actually be able to spot where there is no liquidity on the market and if we think about this logically right when we're within a trend and price obviously moves with higher highs and higher lows where are those higher lows going to draw to where are those retracements going to draw to you know probably into those areas that where liquidity was not before right and then what's going to happen once we get into the those areas, market makers can execute their orders because they know, right, there is a emptiness of liquidity. They know that right when they place their orders within their markets going to move in their direction. So how is this beneficial to us?
How can we, you know, we'll talk about how we can spot it in two days on the next trading video, but why is this beneficial to us? One, it helps us accurately kind of understand, okay, where does price want to draw to when it's retracing, right? Fair value gaps are used for retracements. I don't use fair value gaps for like... entries necessarily I use liquidity sweeps to understand where markets going and then I use fair value gaps to kind of like figure out where price maybe wants to draw to or for like a secondary entry and we'll go into all of that stuff once we get deeper into strategy but this is super useful because we see price in an uptrend drawing back down and we can find a liquidity void and then we see a reaction off of that or like a break of structure on a lower time frame, boom, like why wouldn't you execute that?
Because you know, there's a lack of orders lying within there. You know, the trend is going up. And if you see a break of structure on a smaller timeframe after a fair value gap or an imbalance or a liquidity void getting filled on a larger timeframe, why wouldn't you enter there?
You know, that's literally, you know, you see, okay, prices in this range where there's a lack of liquidity for opposing orders, right? If we're in an uptrend, there's no sell order. laying within here and then we see a break of market structure on a lower time frame why wouldn't you execute right doesn't that make so much sense for you to execute on a trade like that versus oh price hit my fucking ceiling are we being dead ass right now like let's use our let's use our brains okay um so i mean with that being said that's that that literally is what what fair value gaps are it's literally just a lack of orders within the market and that's what causes the imbalance to be made the um the big ass candle right you guys are and we'll talk about how to spot them in two days but when you guys like see them within the market most of the time it's a big candle down why because there's literally no orders stopping it from dropping that far down same thing with the upside there's no sell orders within there that's stopping it from pushing so high up and then when price comes back into that range right it gives the market makers to you know the opportunity to keep pushing price in the direction that they want to and again once we start getting all these pieces it's like you know i'm sure even after this video you'll you guys were so we'll start looking into that even more by just seeing okay we got liquidity sweep break of structure we see the trend start starting to form and then, okay, now I have a fair value gap.
Oh, I noticed it gets filled smaller timeframe, break of structure. Boom. We're in.
Okay. And it's literally as simple as that. Like that people really make trading a lot harder than it has to be. And you guys can really fucking simplify it. If you just say, okay, this is exactly how price moves.
You know, what do we use fair value gaps for? Retracements. Cool. When we see a retracement in the market, figure out where the imbalance is scaled down to a lower timeframe, find, find a break of structure, continue.
Continuation, boom. Come on, that shit is so easy. And then liquidity sweeps, okay, we see liquidity taken out of the market, okay, we see a break of structure, perfect, execute. All of these building blocks, we pretty much have this set up so it's like one size fits all.
You can trade this on any timeframe, you can trade this with any fucking pair, you can literally apply these concepts to every financial market because this is how price literally moves. This is how the market moves and that's why. I love the way that I trade because you can do this on any timeframe. If you can't sit on your computer for like two hours a day, you know, like scalping or like, you know, actually monitoring it.
You can do swing trades where it takes several days to hit. And as we start adding all the building blocks, you'll start to see like, okay, I can use this. I can use this and I don't really understand this. So I don't need it.
Right. That's the nice thing about this. All of these are pretty much execution like pieces.
And it's just like, which ones do you want? you want to use. And the more that you know, the better, because then it's like, holy shit. Now I have like five different confirmations that I can go off of that are all very high confluence and that are all based off of actually like market execution and orders being filled. Who wouldn't want to place a bet on that?
That's why I love trading because I can be like, okay, yeah, I'm actually going to bet on this because I actually believe in this versus, you know, oh, like I think it's going to go down because it, you know, like hit a ceiling. Just shit don't make no sense. So with that being said, that's for value gaps explained.
We'll talk about how to spot them tomorrow. No homework today. Actually, the only homework you have to do is do something that's actually productive. Don't sit around. I mean, if you're watching this video, odds are you're doing something productive right now, but do something else after this video.
So you watch this video, go take notes, go on a run, go to the gym, do something that's hard, do something that's uncomfortable. Trust that's where you grow. All right, when you put yourself in uncomfortable situations, that's where the growth begins. And hey, man, I'm still trying to, you know, get uncomfortable even while on vacation. We're in Miami right now.
I very well could have just said like, yo, the Wi-Fi's ass. I don't want to upload this video. But here I am on vacation making a fucking video and uploading it on ass Wi-Fi. So and then after this, it's like, cool.
Now I feel accomplished. I feel OK with myself. Like I feel proud of myself.
I've got something good done for today. and then I can go have my fun. Like there's a perfect balance of having fun and actual work. Like, and to be able to understand that, like if you're working 24 seven, that's why I always say like, take one day off.
If you're working 24 seven, bro, you're going to get burnt out. You need a good balance, but it's also like, you can't just say, oh yeah, I want my balance and then just like not actually work, right? There's, you know, you know the difference. But yeah, that being said, go do something fun.
Do something productive and then go do something fun. I'll see you guys tomorrow when we talk more about discipline and how we can you know actually start Fucking whipping your ass into shape because we know how fucking terrible you guys are at staying disciplined within these markets So hopefully we can start talking about some tips some tricks some actual exercises For you guys to start practicing to you know actually get you in mind. So that being said I'll see you boys tomorrow. Peace out