Fair Value Gaps and Imbalances Explained

Introduction

• Simplified guide on fair value gaps and imbalances
• Based on ICT teachings and personal trade recaps

Imbalances

• Imbalance price action: price isn’t balanced
• Types of imbalances:
  • Fair value gaps
  • Candle gaps
  • New day opening gaps
  • New week opening gaps
  • Inverse fair value gaps

Fair Value Gaps (FVG)

• Definition: 3-candlestick pattern indicating imbalance
  • One extension candle in the middle creating the gap
• Bearish FVG: Gap between the wicks of first and third candle
  • Indicates lack of buy orders
  • Price likely to fill in and move down
• Bullish FVG: Reverse of bearish, gap in opposite direction
  • Indicates lack of sell orders
  • Price likely to fill in and move up
• Show up on every time frame

Examples on Charts

• Bearish and bullish FVG examples
• Discussion on why some FVGs don't behave as expected
  • Importance of context and bias

Inverse Fair Value Gap (Inverse FVG)

• Definition: When FVG is invalidated to the opposite side
  • E.g., bullish FVG turns bearish if closed below
• Used more for confirmation rather than confluence
• Acts similarly to breaks of structure
• Examples on how to identify and use inverse FVG in trades

New Day and New Week Opening Gaps

• New Week Opening Gaps:
  • Price closes and opens at different points creating gaps
  • Price likely to fill in the imbalanced price range
  • Example described with weekly chart
• New Day Opening Gaps:
  • Similar to weekly, but observed on daily charts
  • Examples provided
• Candle Gaps:
  • Similar but occur on smaller time frames, like 1-minute
  • Examples provided

Conclusion

• Comprehensive coverage of imbalances and various gaps
• Encouragement to understand daily bias and execution
• Mention of additional resources and free courses for further learning

Tips and Recommendations

• Ensure proper context and bias before taking trades
• Look at all types of gaps to fully grasp price action
• Utilize provided resources for deeper understanding

Additional Resources

• Links to further content on daily bias and executing trades
• Information on boot camps and transformation programs
• Links to free comprehensive course without ads

Closing

• Encouragement to like, subscribe, and explore additional resources
• Appreciation for the audience’s time and attention