I've made thousands of people profitable using fair value gaps and I want you to be the next welcome to aros's World of fair value gaps now there's seven puzzle pieces that we need to collect and by the end you will know every little secret about fair value gaps now we need to make sure we're on the same page here so let's start with puzzle piece number one the different names we have four different names we have a byy we have a CBI we have an imbalance and a fair value Gap now these different names all
mean the same exact thing but we'll dive into the exact meaning at piece number three but first we need to go over piece number two what does it look like you might think I already know what a fair value Gap looks like but you don't know how we Define it and the way we Define it is crucial to understand the advanced concepts later on so a fair value Gap always has three Candles now let's take a look at a bullish fair value Gap the first candle can be an up candle can be a down candle
it doesn't really matter for this example let's say it's an up candle now the second candle at all times is what I call an expansion candle because it expends higher or in a bearish fair Val example it expands lower and that body that closes above the first candle High that's the part that can be a fair value Gap once the third candle closes and the third candle is arguably most important because it determines if we even have a fair value Gap in the first place if it trades back to the same level as the first
candle high that means there's no fair value Gap but if the third candle in its duration never trades back into the first candle High then we have a fair value Gap and exactly inversed for a bearish fair value Gap now that's not the only reason why this third candle is extremely important because it also determines what type of fair value Gap we are going to have a good or a bad fair value Gap now we'll touch on that in just a second but first we need to move on to piece number three the purpose so
what is the purpose of this fair value Gap and why is it important and why can we use it to trade so remember in piece number one the different names that we mentioned now we want to understand them a little bit better we mentioned byy and CBI and they are opposites of each other because BC refers to a bullish fair value Gap and CBI refers to a bearish fair value Gap byy stands for buy side imbalance sell side inefficiency and CB is the exact other way around so sell side imbalance buy side inefficiency now those
are already some Advanced words so let's break that down one by one so if we take the word busy and we first focus on buy side imbalance those first two words and that refers to a bullish fair value Gap where the word buy side indicates that we went higher so we bought and the imbalance refers that something is wrong now what is wrong the mark Market is always trying to balance itself so when the market moves too fast towards the buy side so higher bullish in this case that leaves behind is what we know a
bullish fair value Gap and it's an imbalance because price moved too fast whilst going higher and because it moved too fast sellers didn't get a fair chance to get involved in the market only buyers got a chance to get involved and that's exactly where the second part of busy comes from sell side inefficiency the sell side is inefficient because we haven't offered those sellers a fair chance to get involved yet so this busy this buy side imbalance sell side inefficiency tells us we moved higher too fast and a CBI tells us the exact same just
inversed so a sell side imbalance we moved lower too fast and we have a buy side inefficiency so buyers didn't get a fair chance to get involved only sellers so now we understand two of the four names actually already three of the four names because the third name that we had was imbalance and now we also understand what this imbalance is it's simply when price moves too fast towards one side of the market it leaves behind an imbalance and we also actually understand the last word which is fair value Gap because we discussed this inefficiency
where one side of the market wasn't offered a fair chance to get involved that's it it's in the words that we're using a fair chance because if we move higher too fast again we create this bullish fair value Gap where only buyers got a fair chance to get involved so now we need to retrace back into that fair value Gap to offer a fair chance to sellers to get involved so what are we doing we're offering fair value to the other side of the market to then continue they all come down to the same exact
thing but a byy and a CB is more advanced terms where an imbalance is very simple for this video we will focus Fus on the terms fair value Gap and fvg now the interesting part is that we just went over how it creates this imbalance in price so it moves too fast so by its definition it tells us price went too fast in other words it tells us the direction of price are you starting to see why these F Val gaps are then so powerful because they literally tell you what price wants to do these
F gaps not only tell us the direction but also how we are going to get there but first let's focus on how fair value gaps tell us the direction of price so we arrive at piece number four the direction now the direction in price is also often referred to as a bias because the first thing you have to determine when you open a chart is are we going to be bullish or bearish so how do we use fair value gaps for this well we start off by focusing on the most recent fair value gaps but
before we do that we need to understand time frames I use the following time frames for my buyas and I would advice for you to do the exact same thing the monthly the weekly the daily and the 4our time frame now you might think and you'll see that these time frames are quite high and that's for a reason because in trading the higher the time frame the stronger the time frame so that means from these four time frames the monthly is the strongest time frame that we are using so if the monthly tells us that
we want to go higher and want to be bullish then the other time frames will simply follow the monthly time frame and that's again because it's the strongest in Dutch we have a saying that it's the right of the strongest so whatever the strongest wants to do that's what will happen now I don't just want to leave it at that because why actually is this as well why are these higher time frames the stronger time frames institutions hedge funds they trade with a large amount of volume with a large amount of orders now because they
do this they also move the market and the bigger the amount of orders the more difficult it is to get involved in the lower time frame because for every buyer there needs to be a seller and if you are trying to sell me th cars I might not have the money for it but if I gather a group of a thousand other people that are also looking to buy a car then we together might be able to buy your thousand cars it's the same in the market because on the higher time frame there are loads
of orders on the lower time frame not so much so they move the market by getting involved on the higher time frame but not only that because we just mentioned that they move the market and sometimes they move the markets too fast so what happens when they place a huge order and they move the market too fast it leaves behind a fair value Gap so those fair value gaps are the footprints that those big orders leave behind in other words when they move the market they are literally creating the market essentially they are leaving behind
signs so how easy is it for us to Simply follow their Footprints let's open a chart but before we do that I want to emphasize on the fact that these fair value gaps they work on every single market so whether it's Forex the Indian market the US indices or the stocks or crypto whatever you can think of these F Val gaps they work because it's the basic principle of how any given Market operates so when we open a chart and we're looking at EUR US dollar right here then we first of all want to start
on the monthly time frame to tell us that direction but what do we actually pay attention to when we open a well those fair value gaps yes but there's one step before that because we pay attention to the lags in the market and we have lags with fair value gaps and we have lags without fair value gaps so then what's a lag to understand a lag we need to understand swing highs and swing lows now this is a very easy concept because a swing high is a three candle pattern where the candle in the middle
so the second candle sticks out at the top so this candle right here is higher than the one left of it and higher than the one right of it that means we have three candles right there the middle one is sticking out at top and once the third one closes so the one on the right once that candle closes we now have this swing high sitting right there now the same exact thing for a swing low so a swing low is again that three candle pattern where the candle in the middle is sticking out not
at the top in this case but at the bottom so the candle in the middle is lower than the one to the left of it and lower than the one to the right of it when the third candle closes then this swing low right there is confirmed and it's actually a swing low now if we take this swing low sitting right there towards this swing High then this is a lack from the swing low towards the swing high right there this is a bullish lack but if we look at this example and when we have
a swing High followed by a swing low that's when we have a bearish lack now you'll notice right here that we have a few lags for example this one from that low TOS that high with a fair value Gap in the middle right there but we also have this lag from this swing High towards that swing low with no fair value Gap right here on the monthly time frame and this is where it gets interesting because according to my data and what I've discovered years ago is that when a lack has a fair value Gap
in it it has a significantly higher percentage of actually holding and holding meaning that it continues in the direction of the fair Val Gap so it's a bullish F Val Gap a bullish lag that means we can continue higher whereas lags without F Val gaps in them are a lot lower probability of holding now those lags with a fair value Gap in them is what I and the mmt and you might have seen it Go quite big on social media as well order flow lacks and when we open a chart and start on the monthly
time frame we always want to focus on the most recent order flow lack because they will exactly tell us what price we'll want to do next now that does not mean that we only focus on orderflow lags because lags without a fair value Gap in them also tells us something right now because an orderflow lag has a fair value Gap it tells us that we want to continue in a direction most likely because that's where the big orders are following those Footprints but when we don't create that fair value Gap it tells us the exact
opposite for example we have this lag right there continuing lower because it does not create that fair value Gap lower that means there are no big orders actually selling so there's no intention no desire to continue low otherwise it would have also created a bearish fair value Gap so when it's not an orderflow lack and it's a lack without a fair value Gap in it we can confidently say as well well we in this case might actually want to continue higher so when we continue focusing on this direction then here we see on the monthly
time frame we have this fair value Gap in other words we also have this order flow lack to continue you higher now what you want to do after that is go into the weekly and the daily and make sure they are in alignment with the monthly time frame so the monthly right here tells us that we might want to continue higher we want to make sure that we're then ideally as well looking for higher prices on the weekly the daily and the 4H hour and when everything is in alignment that's the best trading ID now
I need to emphasize on the fact as well that we don't want to use old fair value gaps old fair value gaps are fair value gaps that are not in the recent lag so in this case we have a fair value Gap sitting right there all the way below price action this fair value Gap is not part of the recent order flow lag because the recent order flow lag is this right here these old fair value gaps they can be potentially used as a Target so for example if we start disrespecting the orderflow here and
we want to continue low we can Target this fair value Gap but these old fair value gaps do not tell us the overall direction of price because the direction is told by the most recent order flow lags but that's not all because when we determine we have this orderflow lack and we might want to continue higher in the direction then how are we actually going to deliver higher so what is the support or the resistance area we can continue higher or lower from that leads us to piece number five The Narrative now the narrative simply
said is how we are going to get there imagine you're in your house whever you are and you want to go up a floor then your bias your direction is the intention that you want to go up and then how are you going to get there well I assume that most of us are going to use the stairs so the stairs are the narrative it's the method of getting there so going higher and you probably already guessed it that fair value Gap not only tells us the overall direction but it also tells us the narrative
so how are we going to get there in other words in a bullish example it's a support area that we can retrace back into to continue higher from and in a bearish example it's a resistance area that we can continue lower from because we understood those names of the fair value gaps we understood it was a buy side in balance and a sell side in efficiency so we also need to offer sellers a fair chance to get involved now because of this reason a fair value Gap is something that attracts and also rejects so think
of it like this when you're in a hurry you want to go out of the house you need to get somewhere and you forget your keys when you just went out the door so what do you need to do you first need to go back to grab the keys and then you can go again that's the same thing a fair value Gap does but a fair value Gap doesn't forget its Keys it forget to offer fair value so this fair value Gap right here that we have it not only tells us we might want to
continue higher it also tells us that we can trade back into it right there to then reject and continue higher from it again so when we leave behind a fair value Gap and we trade back into it so we create a retracement we're always expect ing that fair value Gap to create a new fair value Gap in the same direction so what we did with this previous fair value Gap right here we saw that eventually we retrace back into it we continued higher and eventually created a new fair value Gap from the previous fair value
Gap this again overall helps us in understanding the direction for example right here we have this bearish fair value Gap this bearish F Gap never created a new bearish F Gap what does that tell us that tells us that this bearish fair valap right there is not strong enough to push price lower again in other words we might want to continue higher and be bullish instead then when we do create this retracement and we create this rejection to continue higher again this rejection is of course what we can profit from but let's stay with the
narrative for now and understand first of all what makes a good and a bad fair value Gap just because it looks like a fair value Gap doesn't mean it's a good one we need to understand if we can actually trade off of it the first thing we need to make sure of is that our fair value Gap is in context of other time frames so in a case where we need to find our Direction in price and we have two fair value gaps so we have a daily bullish fair value Gap and below that we
have a weekly bullish fair value gap which fair value Gap are we most likely going to trade back into to then continue higher in this case we want to use the higher time frame one so in this case would be the weekly Fair Val Gap why well that's because the fact that we mentioned the higher the time frame the stronger the time frame so imagine it like a magnet those fair value gaps are magnets and also Rockets we can attract back into it and also reject from it again and the higher the time frame the
stronger that magnet and Rocket is so here we are on us doll JPY and we are on the daily time frame now if we take a look at the daily time frame we see that it has this daily Fair value Gap sitting right there in the most recent order flow lack so some might think well now we want to continue lower and we can use that F Val Gap to continue lower from it but that's not the case this is why it's important to start on the higher time frames and then work your way down
because if you were to take a look at the monthly first then we see on the monthly we have this fair value Gap sitting right there this gray box is the monthly fair value Gap this right here is the daily fair value Gap so this daily F Val Gap was not in context of the monthly time frame and since the monthly time frame is the stronger time frame because it's above the daily time frame we are more likely to retrace back into the monthly Val Gap and then continue lower now this goes for every time
frame so what we're going to go over your entries later on also need to be in context now this sounds like a pain but it's not hard and it actually is very easy because if you just start on the highest time frame then work your way down you will be all right now later on to make it as easy as possible for you I will also give you the right time frames and which time frames you ideally want to use now this is one way to filter out good fil gaps from Bad fil gaps then
next what we want to do to focus on the best fair value gaps is to only focus on the most recent orderflow lag like we've already mentioned and also focus on the unmitigated fair value gaps so sometimes I see people focusing on Fair Value gaps that have already been traded back into before now let me say this very clearly a fair value Gap can only be traded back into One Singular time and if it does trade back into that fa value Gap a second time it's not trading from the fair value Gap it's trading from
the swing high or swing low that it left behind in the fair value Gap so for example we have this fair value Gap right there this fair value Gap has been traded into once right there and it did not push higher initially when this is the case this F Gap has now been used up don't focus on the fair value Gap anymore to trade from it but what we do leave behind is this swing low that was created in the fair value Gap so here we see that this swing low has now been used to
continue higher from so unmitigated fair value gaps are fair value gaps that have not been traded back into before so for example this right here is a fair value Gap that hasn't been traded back into so that's unmitigated those are the fair value gaps we want to focus on if you don't do this this you will give up a lot of accuracy in your trading and very simply s if you don't do this it contradicts the basic understanding and definition of a fair value Gap it would be the same as me placing a random line
on my chart and then saying it's support or resistance now that might work and we might see some rejections for example this right here perfect rejection from the random line I just placed but it's not accurate because 9 out of 10 times it does not work this is so extremely important so do yourself a favor coming from someone who has mastered fair value gaps and who has made it their essentially lives work do not and I repeat do not use fair value gaps that have already been traded back into you don't need to focus on
them they're only useful to tell you what happened there so if price continued from it or not that leads us to the next point for a good fair value Gap we also need to understand what have the previous fair value gaps actually done a good sign is when we have a fair value Gap and we trade back into it that fair value Gap leaves behind a new fair value Gap in the same direction for example we have this fair value gap on The Daily time frame that created a new fair value Gap sitting right there
now this new fair value Gap did not create a new bearish fair value Gap okay so we create a bullish fair value Gap instead this new bullish fa Gap also creates a new bullish fa Gap that's good when previous fvi gaps create new fvi gaps in the same direction but you will also find the opposite where both bullish and bearish fair value gaps are not creating new fair value gaps now this is not to be ignored because this means something this is the market telling you that we are consolidating and a consolidation is what we
want to avoid so here we see that we have this fair value Gap we also have this fair value Gap sitting right there then we have the bullish value Gap and the bearish Val Gap sitting right there as well you see that when we trade back into these fair value gaps we don't create new fair value gaps from those F gaps so what happens when this is the case for both bearish and bullish F gaps that means we are in a consolidation so when you see that happen avoid it in a consolidation where we're staying
in the same place consistently those fair value gaps is not something we want to trade from we want to wait until we create a new F Gap and that F Gap is holding so creat a new FV Gap from the previous FV Gap that's when we have good trending conditions again now next is also something beautiful because we can understand where fair value gaps will actually form so predicting where fair value gaps will form because fair value gaps tend to be created at previous fair value gaps and at swing highs and swing lows that haven't
been traded back into before now why is this let's say in this case that we are bearish and we are looking at lower prices and towards the left we see we have those old fair value gaps again not fair value gaps that we necessarily want to trade from but those fair value gaps can still create a rejection so what we see right here is that we expand lower into the fair value Gap right there then because of the fair value Gap right here we create a rejection to retrace back into the fair value Gap that
was created to then continue lower again now this is also seen with those swing lows so here we have swing low right there the same thing happens with this fair value Gap right there the reason we create the retracement is because we have a rejection from the swing low right there then the fair Val Gap is what we can continue lower from again because those are the most recent order flow lags now I like to compare this to a ping pong effect where you go down it pings up and it pongs down again so it
goes back and forth consistently now when we create the reaction from those swing lows or from those FV gaps to create a fair Val value Gap then how the third candle reacts right there or reject tells us what type of fair value Gap we will have now there's three types of fair value gaps and the first variant that we have is a breakway gap and a breakway gap right here is where we have a fair value Gap so it looks like a normal fair value Gap but the third candle is also an expansion candle a
breakaway Gap is a fair Val Gap that also looks like one but we actually don't want to trade from it and we're not expecting retracement back into it in the short term now in the scenario where we do retrace back into that Breakaway Gap in the short term like this example then often times this will either lead to consolidation or opposite prices so in this case a bullish breakway Gap leads to small consolidation right there to then continue lower instead so this Breakaway Gap essentially tells us the direction but it's not a narrative that we
want to trade from instead what we want to do is when we have a breakway gap you want to go down time frames to find a good fair value Gap so then the question becomes well what do these good fair value gaps then look like now before we discuss that in just a second let's also go over the opposite of a breakaway gap which is a rejection fair value Gap a rejection fair value Gap is the opposite where the rejection from the third candle is so big that it either fails to create a fair value
Gap in the first place or it leaves behind a tiny fair value Gap so if we take a look at this fair value Gap right here then we see it's a very small fair value Gap right there and if we go back in time the second candle the expansion candle before the third candle even opens is very large so it had the opportunity and the potential fair value gap size could have been something like this if we did not create a retracement at all now this area is 100% right here the potential fair value Gap
and instead the Third candle was such an aggressive rejection that we did not even leave behind 10% of what it could have been this tells us that it's a rejection fair value Gap and when this is the case we want to avoid it why do we want to avoid it when we want to continue higher we obviously want a lot of bullish intention that's why we trade also with fairv gaps when that third candle is such an aggressive rejection to continue lower then that tells us as well well there's actually a lot of weakness so
a lot of bearish strength right here in the market so in this case what can happen well you'll see that just like a breakaway Gap when we do trade back into it we'll either consolidate or again we'll see opposite prices so when you have a huge rejection like this one you want to be more careful and you want to require more confirmation in your entries something we're going to go over later on now this next one is quite Advanced it's still part of the rejection fair value as well but it still continues in the same
direction so what we're seeing here on NASDAQ is that on the daily time frame we have this potential fair value Gap very similar to what we just saw is that we do not create that fair value Gap so we have this rejection but instead we still continue higher this is known as an immediate rebalance so when we create this imbalance right here of the second candle the expansion candle and the first candle high right there if we trade back into that that will again determine if we create that FAL Gap now what we see right
here is that we trade back into it do not create that FAL Gap but still continue higher this immediate rebalance is signaled by having a long Wick at the bottom right there in the third candle whil trading back into the first candle high that long Wick at the bottom is something that we know as candle Signs Now candle signs will dive into that in a completely different video but that tells us that on the lower time frame right here we still have rejections so new for Value gaps to continue higher when this is the case
and we go down a time frame and we can still find new fair value gaps then we can simply trade from those new fair value gaps to still continue in the direction but then again the question what is a good fair value Gap a good fair value Gap is in the middle so it's not a breakaway Gap it's also not a rejection fair value Gap now what does that mean the third candle is a consolidation when relatively seen is a small candle or a small body for example right here on ES we have this fair
value Gap created right there the third candle is not an expansion nor a big rejection when this happens this is a good indication that we will have a simple sting into the F Gap to then again reject and continue higher now since we want to see that third candle ideally be in consolidation you also of course have to be careful trading the third candles for example here on the monthly time frame we just had this expansion candle right there we are now creating the third candle right there if this is going to be a good
fair value Gap then we might see a third candle consolidation now this is on the monthly time frame so obviously and logically speaking that's 30 daily candles and within those daily candles imagine how many 5 minutes 15 minute candles you have and the reason why I say that is because if the monthly is a third candle and we're expecting a monthly consolid ating third candle then all the time frames below will be very difficult to trade and lower probability so if we go down a time frame right here then we can actually visually see this
on the daily time frame as well where this doesn't really go anywhere it's a big consolidation until the month is over right there and the fair value Gap has now been created now the reason this consolidation happens is because the market is you could call it lazy or maybe a better word for lazy could be efficient because the market is not going to go very far like a breakaway Gap to then come back all the way in the future somewhere the market will create that third candle consolidation so in the next few candles it has
a very easy path to trade back into it to then continue without leaving anything behind so to use the analogy again of you leaving your house or whatever it may be and you forget your keys and it's better if you're still on your doorstep instead of already at your destination and you have to drive all the way back to then come back again so what the market does it forgets its Keys very fast to then return in the next candle to then immediately continue again because that's as efficient as it can be so if you
always want to trade the best fair value Gap the highest probability fair value Gap then you want to focus on the before during and after so what does this mean this is everything we've gone over this far ask yourself what is this fair value Gap coming from is it coming from a previous fi Gap so in this example we have this fi Gap and this fi Gap creates a new fi Gap so the before phase is checked off it's perfect then you move on to the during phase so how is the third candle created right
here is it a big rejection is it an expansion is it a consolidation well right here when we see this fair value Gap yes it's a closure above the previous candle high right there but is that most likely going to be a breakaway Gap no there's also a long Wick at the top right there in my opinion this is a perfect consolidation where the body is also a very small candle then this fa value Gap is already a good fair value Gap that we can trade from so how do we know if the rejection from
this fair value gap on the lower time frame is actually good and we can profit from it and that's what leads us to piece number six the entry first of all you need to understand that the market is fractal this means that whatever happens on the higher time frame also happens on the lower time frame of course there's some nuances like we mentioned the higher time frame is stronger but the way it looks and the way it acts is the same across every time frame now before we can go into the lower time frame we
need to understand two things the Target and time frame alignment what is the target when we want to understand the target we need to understand the retracement that caused the move back into the fair value Gap so in this case it is this candle right here this previous candle that was responsible for retracing back into the fair value Gap the retracement will either leave behind a swing low in a bearish example swing high in a bullish example or in this case there's no swing low we can use the previous candle low so when we retrace
back into this fair value grip right there the previous candle low right here is the main target when we reach this target we now stop looking for entries this is what I call context and what I discovered is that when you trade within this context your trades are a lot higher probability and they have more chance of actually playing out now depending on if we have a swing high or swing low and if we have then you use that otherwise you use previous candle high or previous scandle low so next is time frame alignment and
time frame alignment is how we know which time frame to go into so when we retrace back into this month forev gap which time frame do we want to go into to confirm the forv Gap to continue lower and look for our entry the time frame alignment that I discovered is the following when we talk about our normal entries we have the following monthly to 4H hour weekly to 1 hour daily to 50 minutes 4 hour to 5 minutes 1 hour to 1 minute 50 minute to 1 minute the first time frame on the left
refers to the fair value Gap time frame the time frame on the right is your entry time frame so in this case we're expecting this monthly for Gap to push lower we want to look for our entry confirmation than on the 4-Hour time frame now that is the normal when we talk about sharp turn entries which we're getting into as well we want to see monthly to daily weekly to 4 hour then the daily to 1 Hour 4 hour to 50 minutes 1 hour to 5 minutes and a 15 minute still with the 1 minute
as well so if we first take a look at our normal entry and we go into the 4H hour time frame right here then what we want to see ideally is a sharp turn a sharp turn is the following when we create a fair value gap on our entry time frame right here back into the higher time frame fair value Gap that we expect lower prices from that's the first part of the sharp term after that we would like to see a new fair value Gap to push out of the higher time frame fair value
Gap so we have the fair value Gap in and the fair value Gap out right there these fair value gaps don't need to be overlapping with one another now that we have a fair value Gap into our higher time value Gap where we actually want to see lower prices that signals that there's manipulation happening in the market people are being manipulated right there by fast price action to poten potentially Buy and they think price might continue higher where instead price actually continues lower when this happens this is perfect now when we then retrace back into
a fair value Gap right there and we create a new fair value Gap lower then the fair value gaps lower right here that is where you want to start looking for your entry so for example this fair value Gap sitting right here covering what do you cover you cover the order flow lags high so the order flow lack that you actually entering from and as a Target you simply want to look at a 2 RR when you are just starting out now this is a 4-Hour entry a 4-Hour entry might not be what you want
but you can also go into the lower time frame of the 4our we mentioned the time frame alignment and from this 4our vet for example you can also go into the 15 minute or the 5 minute if you want to now if we zoom out and we go into the daily time frame on The Daily we see that we eventually have a sharp turn as well in form of this beish fair value Gap right there now there initially was no fair value Gap coming back into the month value Gap right there but we did have
a previous fair value Gap right here and a good sign as well is that we had an expansion candle right there coming back into the mon Val Gap so even though it's not a textbook sharp turn where it's a clear F in for G out it's still a good confirmation because as long as we have the momentum coming in and momentum coming out again the manipulation happens so when we talk by sharp turn entries the beauty of it is that sometimes you only need one fair value Gap out of your higher time frame fair value
Gap to Simply enter so this fa value Gap is enough right there now let's say again you also don't want to enter from the daily perfect you can from this daily F Gap also look at the 1 hour or the 15 minutes so in this case the daily and the 1 hour is closer to each other than the daily in the 15 minutes that means the closer they are to each other the less confirmation you need so for example exle from the daily to the 1 hour you would only need one fair value Gap out
of this daily fa value Gap right there so one bearish fair value Gap but on the 15 minute you would want to see two bearish fair value gaps so from this daily fair value Gap right here we see on the 1 hour again we have the fair value Gap in and we also have the fair value Gap out right there when we enter from that fair value Gap out we want to cover the orderflow lag High to then Target a one to two RR to continue lower right there and again if the 1 hour is
not your entry time frame or you want to go even lower then start using these 1 hour for gaps to go into the 5 minute or the 1 minute now the entry time frame that you want to use completely is again up to you you can confirm it as much times as you want so you can even go into the 15 minute to then again the 1 minute now the thing you have to determine is if you want to use sharp turn entries and then stick to the same time frame alignment whether you enter with
a market execution or a limit order that depends what type of fair value Gap we create so for example in this case this daily fa value Gap right there that's just a normal consolidation fair value Gap so we can look to enter from that fair value Gap right there and inside the fair value Gap but if we take a look at the higher F Val Gap that was already created a little bit earlier right there sitting right there when we have a scenario like this where it's a breakway gap then from The breakway Gap we
can simply already enter as it's created right there covering the previous fair value Gap why is this is because we don't expect and we don't even want to see a retracement back into that Breakaway Gap in the first place this is already a little bit more advanced so first of all I would advise just focus on those consolidation those perfect third candle for Value gaps and only enter from those now what would you do in the case of a rejection fair value Gap when we create a rejection fair value Gap you want to have more
confirmation so what does that mean more confirmation is very simple first of all you determined you want to use sharp turn entries so we had that time from alignment from the daily you would go into the 1 hour for example all you want to do is take that Baseline and go up in confirmation so what do I mean with that here on the daily we have this daily fair value Gap right there now that daily value we could argue it's quite a big rejection right there coming back into that daily F Val Gap so what
we can do instead of wanting a 1H hour sharp turn which is our normal entry our Baseline we can go above our Baseline so we can go and look for a 4H hour sharp turn because again the closer the entry time frame and a narrative time frame the better or the stronger the confirmation and the less confirmation you need so a 4-Hour sharp turn from that daily fa Gap that can be classified as extra confirmation so this right here could be your entry but then the question Rises when do we go break even last piece
of the puzzle number seven risk management risk management and going break even is very simple because when we enter from this 4our fair value Gap right there or again we want to confirm it extra by going to the 15 minute or even the 5 minute but for this example let's say we enter on this 4our F Gap and we cover the order flow lag High targeting a simple 1 to2 RR then we want to go break even when fair value gaps are being created below below our entry level so we see right here fair value
gaps are being created below our entry level the reason why we can then go break even is because we expect those F gaps even if we do want to create a retracement to hold and to then continue lower so in other words there's no reason for price to return back to our entry level believe it or not but this video is only a small percentage of valuable things that we discussed inside the mmt so if you're interested in that take a look at Aro doio all right perfect thank you