Identifying a Reliable Fair Value Gap

Only one fair value gap is legit here, gotta focus on the check or middle one. Why? Let’s break down all three. First up, the upper one looks nice but it’s in the premium zone, above the 50% level from the last swing low to swing high. That’s where prices are high, and in premium, we only look for selling. So, we’re tossing that one out.

Yeah but marking a fair value gap doesn’t guarantee your trade goes well. Prices can come back and fill the gap but still not align with your direction. Some traders swear by Fibonacci retracement which can help, but it’s not a sure thing. Even when you spot a gap, don’t get too comfy without watching the candle that fills it. It’ll tell you if the market respects that gap or not.

Understanding fair value gaps can definitely boost your trading success. But it’s not the only thing in your toolkit. You gotta know liquidity zones, order blocks, market structure... all that jazz. Master these concepts, and you’ll level up as a trader. Just remember to keep things simple even with all this info.

That’s not my go-to method for spotting valid FVGs. Everyone has their techniques, but I check the fixed volume profile. If there’s a big spike with low volume, that’s how I know it’s valid. Using volume profile makes it so much easier.

Fair value gap is just one piece of my entry strategy. Learning about it while trading crypto is key, but even valid gaps can get violated at times. So, while I use it, I always watch how price reacts in that gap before jumping in.

I see FVG as the next likely stop for price action, but it doesn’t tell me if it’s gonna go up or down. If I spot a bearish candle forming, the lower price FVG could become a solid take-profit area when shorting.

Can’t stress enough how important it is to use Stop Loss. Every mentor should hammer that in. The market's unpredictable, doesn’t always do what we think, even when it seems clear. It’s like birds in the sky, price doesn’t just fly straight.

It all hinges on market conditions for me. Forex isn’t set in stone; everything moves with certain conditions based on market sentiment. When the market is satisfied, movements are smoother. If not, it’s choppy and risky. So, it’s about understanding when the market's balanced.

If traders only lean on fair value gaps without other strategies, they might get rekt. Market tends to be erratic and unpredictable. You need a broader knowledge base to make trades even with that candle timing. Don’t forget: FVGs are imbalanced and prices might not retrace after strong moves.

If the OP had an actual chart, they might pick a different FVG point. Experts say there’s no one-size-fits-all method in technical analysis. It’s more about finding patterns and trusting your gut.

There’s so much to learn and utilize when trading, and FVG is just one of many vital elements. On any trading platform, recognizing FVG requires understanding time frames, weak gaps, and candlestick patterns. I bet AI tools can help identify them before you get into a trade.