Introduction and Overview

The speaker claims to have made $113,000 in a single trading day using a simple concept called fair value gaps. They will demonstrate how fair value gaps can form a complete trading plan and incorporate various concepts such as risk management. The speaker emphasizes the importance of paying attention to different uses of fair value gaps that are often overlooked.

Fair Value Gaps and Their Types

• Fair value gaps are used to create a trading plan.

• Different types of fair value gaps include:

• Creation of new fair value gaps

• Lack of new fair value gap creation

• Rejecting vs non-rejecting fair value gaps

• Three phases of a fair value gap

• Contextual fair value gaps

• Overlapping fair value gaps

Paying Attention to Current Lag Fair Value Gaps

Only pay attention to the fair value gaps within the current lag on any timeframe. The current lag is defined as the most recent swing low to swing high or vice versa. Ignore fair value gaps outside of this range.

Importance of Current Lag Fair Value Gaps

• Focus on fair value gaps within the current lag.

• Disregard fair value gaps outside of the current lag range.

• Example given on EUR/USD daily timeframe.

Analyzing Monthly Fair Value Gap for Price Direction

Analyzing monthly fair value gap can provide insights into price direction. Check lower timeframes for confirmation.

Analyzing Monthly Fair Value Gap

• Monthly fair value gap can push price lower.

• Check lower timeframes for confirmation.

• Swing highs and swing lows provide additional context but focus on fair value gap analysis.

Analyzing Daily Fair Value Gaps for Trading Opportunities

Analyzing daily fair value gaps can provide trading opportunities. Pay attention to different types of fair value gaps.

Analyzing Daily Fair Value Gaps

• Two fair value gaps in the current lag higher.

• Wait for confirmation before taking action.

• Small fair value gap created, not ideal for use.

• Lack of new daily fair value gap creation indicates potential reversal.

Importance of Creating New Fair Value Gaps

The importance of creating new fair value gaps after a previous one is identified. Expansion phase and consolidation are key factors to consider.

Importance of New Fair Value Gap Creation

• Previous fair value gap should create a new one on the same timeframe.

• Expansion phase and consolidation indicate the creation of a new fair value gap.

• Lack of expansion phase suggests an unusual situation.

These notes provide a comprehensive summary of the transcript, highlighting key points and insights related to fair value gaps in trading.

New Section

This section discusses the concepts of liquidity sweeps and runs, as well as fair value gaps and their implications.

Understanding Liquidity Sweeps and Runs

• A liquidity sweep involves sweeping liquidity from one side to the other.

• A run on liquidity occurs when there is a continuous movement in one direction.

• The creation of new bearish or bullish fair value gaps indicates an expansion phase.

Importance of Fair Value Gaps

• The presence or absence of new fair value gaps provides insights into market sentiment.

• If a bearish fair value gap is not followed by a new lower fair value gap, it raises suspicion.

• Disrespecting a bullish fair value gap with overlapping bearish fair value gaps weakens its significance.

Applying Fair Value Gaps on Different Time Frames

• Monthly premium arrays can be analyzed using monthly fair value gaps.

• Lower time frames should have created bearish fair value gaps below the original price discovery (PD) level.

• Combining time frames correctly helps in understanding market dynamics.

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This section emphasizes the importance of waiting for new fair value gaps before making trading decisions.

Waiting for New Fair Value Gaps

• When in doubt, wait for a new fair value gap to be created before taking action.

• Not creating a new bearish fair value gap strengthens the bullish argument.

• A strong bullish argument is supported by significant price spikes and daily fair value gaps.

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This section explains how to identify premium arrays and set targets based on them.

Identifying Premium Arrays

• Premium arrays are determined by analyzing different levels of fair value gaps.

• Disrespecting a monthly bearish fair value gap suggests a shift in bias towards higher targets.

Setting Targets Based on Premium Arrays

• The next premium array to target is the one above the monthly fair value gap.

• Analyzing lower time frames helps determine how price will reach the next premium array.

New Section

This section discusses the three phases of fair value gaps and their implications.

Three Phases of Fair Value Gaps

• Fair value gaps have three phases: consolidation, expansion, and retracement.

• The second candle in a fair value gap should indicate an expansion phase.

• Lower time frame fair value gaps provide insights into the specific candle's behavior.

Trading into Non-existing Fair Value Gaps

• The third candle in a fair value gap prepares for trading into non-existing fair value gaps.

• Consolidation or downward price action facilitates trading into daily fair value gaps.

Please note that these summaries are based solely on the provided transcript and may not capture all the details or nuances from the video.

Understanding Fair Value Gaps and Liquidity Sweeps

In this section, the speaker discusses the importance of fair value gaps and liquidity sweeps in trading. They emphasize that by using fair value gaps, all relevant concepts are incorporated into one strong concept, eliminating the need to pay attention to individual concepts.

Fair Value Gaps and Incorporating Concepts

• Fair value gaps encompass various trading concepts such as power three quarter theory, market maker model, inverse PD race, midnight open, kill zone characteristics, macros, and 90-minute cycles.

• By using fair value gaps, all these concepts are already incorporated into the trading plan.

• Paying attention to individual concepts becomes unnecessary when fair value gaps are used effectively.

Identifying Sweeps vs. Runs on Fair Value Gap Basis

• To understand whether a move is a sweep or a run on liquidity based on fair value gaps alone:

• Remove the daily fair value gap and focus on specific lows.

• A sweep occurs when bullish fair value gaps are created immediately after taking a low and not respecting overlapping bearish fair value gaps.

• A run on liquidity indicates a continuation in the same direction without reversing.

Importance of Daily Fair Value Gap

• The speaker highlights that understanding sweeps and runs on liquidity is crucial for identifying why certain lows get swept while others do not.

• The differentiator lies in considering the daily fair value gap higher as it determines whether price will continue higher or not.

• When marking out support levels or lows without incorporating the daily fair value gap, traders may miss important information for predicting future price movements.

Analyzing Liquidity Sweeps on Lower Time Frames

This section focuses on analyzing liquidity sweeps specifically on the 15-minute time frame. The speaker explains how understanding sweeps and incorporating the daily fair value gap can lead to breakthroughs in trading.

Analyzing Sweeps on the 15-Minute Time Frame

• On the 15-minute time frame, traders should pay attention to liquidity sweeps.

• The speaker emphasizes that understanding sweeps is crucial for predicting price reversals and continuation.

• By analyzing fair value gaps, traders can identify whether a low is being swept or if it indicates a run on liquidity.

Importance of Daily Fair Value Gap in Liquidity Sweeps

• The daily fair value gap plays a significant role in determining whether price will continue higher after a sweep.

• Traders should focus on rejecting above the high of the fair value gap to anticipate further upward movement.

• Marking out lows or support levels without considering the daily fair value gap may result in missing important information for predicting future price action.

Understanding Liquidity Sweeps and Breakthroughs

This section delves deeper into understanding why certain liquidity gets swept while others do not. The speaker explains how incorporating concepts like fair value gaps and focusing on psychology can lead to successful trading.

Analyzing Liquidity Sweeps and Breakthroughs

• The speaker highlights specific lows that got swept but did not push price higher towards previous highs.

• They emphasize that the differentiator lies in considering the daily fair value gap, which acts as resistance or support.

• Understanding why liquidity gets swept and how it relates to the daily fair value gap is essential for identifying potential breakthroughs in trading.

Psychology and Simplifying Concepts

• Traders often struggle with managing emotions due to an overwhelming number of concepts they need to pay attention to.

• By simplifying trading concepts and focusing on key factors like fair value gaps, traders can better control their emotions and make more informed decisions.

• Incorporating fewer concepts allows traders to have a clearer focus and improve their overall trading psychology.

The Importance of Using Fewer Concepts for Better Trading Psychology

This section emphasizes the importance of using fewer concepts to improve trading psychology. The speaker discusses how focusing on key factors like fair value gaps can help traders manage their emotions and make more profitable trades.

Trading Psychology and Concepts

• Traders often acknowledge the importance of psychology in trading but fail to prioritize it.

• Instead of learning more concepts, traders should focus on simplifying their approach to solve psychological problems.

• By incorporating fewer concepts, traders can reduce distractions and better control their emotions during trades.

Prioritizing Profitability

• The speaker emphasizes that making money should be the primary goal in trading, rather than competing to have the most or best understanding of various concepts.

• Traders should prioritize profitability over accumulating a vast number of concepts.

• Simplifying the trading process by focusing on key factors like fair value gaps allows for better decision-making and improved profitability.

Understanding Fair Value Gaps

In this section, the speaker discusses the concept of fair value gaps and their significance in trading.

Fair Value Gaps

• Fair value gaps can be observed on different timeframes, such as 15 minutes or 1 hour.

• Bullish fair value gaps are the ones to pay attention to, while other gaps can be disregarded.

• Daily fair value gaps on a bullish trend can serve as an execution point for trades.

Entry and Risk Management

• The creation of a bullish fair value gap on the daily chart serves as an entry point.

• Once in a trade, it is important to determine where to set break-even points and manage risk.

• Respect for the fair value gap indicates accurate entries and faster break-even points.

Predicting Future Movements

• Expansion phases of potential new fair value gaps indicate further upward movement.

• Price should not come back below the entry point if it wants to continue higher.

• The creation of a fair value gap confirms the intention for price to move higher.

Transitioning to Higher Time Frames

This section focuses on transitioning from lower time frames to higher time frames for better analysis and risk management.

Moving to Higher Time Frames

• After entering a trade on a lower time frame, it is important to switch to higher time frames for additional confirmation and risk management.

• On the 1-hour chart, a bullish fair value gap should be created if price wants to continue higher.

Using One Fair Value Gap

• Only one fair value gap is needed on the 1-hour chart for confirmation and entry purposes.

• Switching to even lower time frames, such as 5 minutes, can provide more confirmation before entering a trade based on the 1-hour fair value gap.

Applying Concepts to Future Trading

This section demonstrates how the concepts discussed can be applied to predict future market movements.

Analyzing a New Trading Day

• Analyzing a new trading day, the lack of a new fair value gap being created indicates a different context.

• The previous day's low becomes the target for the current day in this scenario.

• Understanding bias (bullish or bearish) helps determine whether to target premium or discount arrays.

Using Context and Previous Day's High/Low

• The previous day's high becomes the context high when coming off a premium array.

• Targeting the previous day's low as a discount array is appropriate in this situation.

• Lower time frames may not be necessary if the overall context and fair value gaps are understood.

The summary has been provided in English, as per your request.

New Section

This section discusses the importance of fair value gaps in trading and how they can be used as a confirmation tool for making trading decisions.

Fair Value Gaps and Trading Confirmation

• Fair value gaps on lower time frames can indicate bullish or bearish sentiment.

• Gaps on higher time frames provide insight into the overall market direction.

• Waiting for fair value gaps on London or Asia sessions can provide additional confirmation for trades.

• The target for trades is often determined by fair value gaps.

• Fair value gaps are reliable indicators but should be confirmed over time.

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This section explains how fair value gaps assist in understanding the intentions of the higher time frame and how they can be used as trade signals.

Using Fair Value Gaps as Trade Signals

• Fair value gaps on lower time frames confirm the intentions of the higher time frame.

• Waiting for fair value gaps to appear on London or Asia sessions provides better trade opportunities.

• Trades can be executed based on fair value gaps that align with the overall market context.

New Section

This section emphasizes the importance of fair value gaps in determining trade targets and highlights their significance across different time frames.

Trade Targets Based on Fair Value Gaps

• Fair value gaps serve as ideal trade targets when they align with the context of different time frames.

• Whether it's a 15-minute or 1-hour chart, fair value gap areas are crucial points to consider for entering trades.

• Paying attention to fair value gap patterns helps identify potential trade opportunities.

New Section

This section acknowledges that while using fair value gaps is speculative, observing them over time reveals their reliability in predicting market movements.

Reliability of Fair Value Gaps

• Fair value gaps provide valuable insights into market movements.

• By observing fair value gaps over time, their reliability in predicting market direction becomes evident.

• The accuracy of fair value gaps can be confirmed by allowing time to unfold.

New Section

This section demonstrates how fair value gaps can guide trading decisions and help identify potential price targets.

Using Fair Value Gaps for Trading Decisions

• Fair value gaps indicate the intention to continue higher or lower.

• Identifying fair value gaps helps determine the next target levels for trades.

• Trades can be executed based on existing fair value gaps or by waiting for new ones to form.

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This section highlights the importance of fair value gaps in identifying valid trade entries and suggests seeking additional confirmation when starting out.

Valid Trade Entries with Fair Value Gaps

• Fair value gaps serve as valid entry points for trades.

• Additional confirmation may be required, especially for novice traders.

• Experience helps in recognizing valid entry opportunities based on fair value gap patterns.

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This section provides a real-life example of how fair value gaps can guide trading decisions and lead to successful outcomes.

Real-Life Example: Crude Oil Trading

• A monthly fair value gap indicated a potential upward movement in crude oil prices.

• A daily fair value gap going lower provided further confirmation to disregard the bullish monthly gap.

• Observing a 4-hour time frame revealed a bullish bias based on fair value gap patterns.

• Traders were able to capitalize on this opportunity using only fair value gap analysis.

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This section emphasizes that studying fair value gaps alone is sufficient for understanding various trading concepts.

Fair Value Gaps as Key Trading Concept

• Fair value gaps encompass and explain various trading concepts.

• Studying fair value gaps alone provides a comprehensive understanding of market dynamics.

• Fair value gaps are the foundation for analyzing market structure, order flow, and delivery power.

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This section discusses how fair value gaps can guide trading decisions on different time frames and help identify potential targets.

Using Fair Value Gaps on Different Time Frames

• Fair value gaps provide guidance for trading decisions on 5-minute, 15-minute, and 1-hour time frames.

• Analyzing fair value gaps helps identify potential entry points and trade targets.

• Following fair value gap patterns leads to successful trades.

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This section highlights the importance of fair value gaps in understanding market bias and making informed trading decisions.

Market Bias and Informed Trading Decisions

• Fair value gaps play a crucial role in determining market bias.

• Understanding fair value gap patterns helps make informed trading decisions.

• Traders can rely solely on fair value gap analysis to enter trades successfully.

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This section demonstrates how fair value gaps can be used to anticipate price movements and create profitable trading strategies.

Anticipating Price Movements with Fair Value Gaps

• Fair value gaps indicate potential price movements.

• Observing fair value gap behavior helps anticipate future price direction.

• Creating profitable trading strategies is possible by following fair value gap patterns.

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This section explains how fair value gaps can guide trade targets based on the context of higher time frames.

Trade Targets Based on Higher Time Frame Context

• Identifying key levels based on higher time frame context helps determine trade targets.

• Fair value gaps on lower time frames provide confirmation for trade targets.

• Understanding the full context of fair value gaps leads to successful trading decisions.

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This section emphasizes the importance of fair value gaps in determining trade entries and highlights their reliability in predicting market movements.

Trade Entries and Reliability of Fair Value Gaps

• Fair value gaps serve as entry points for trades.

• Following fair value gap patterns helps identify reliable trade opportunities.

• Fair value gaps consistently provide accurate insights into market direction.

New Section

This section reinforces the significance of fair value gaps in guiding trading decisions and suggests seeking additional confirmation, especially for novice traders.

Guiding Trading Decisions with Fair Value Gaps

• Fair value gaps guide trading decisions by indicating potential price movements.

• Seeking additional confirmation is advisable, particularly for beginner traders.

• Fair value gaps are a reliable tool for making informed trading decisions.

New Section

This section demonstrates how fair value gaps can be used to identify potential price targets and create profitable trading strategies.

Identifying Price Targets with Fair Value Gaps

• Fair value gaps help identify potential price targets based on market context.

• Following fair value gap patterns leads to profitable trades.

• Analyzing fair value gap behavior provides valuable insights into market dynamics.

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This section explains how fair value gaps can indicate whether price will continue higher or lower and highlights their significance in creating expansion phases.

Expansion Phases Based on Fair Value Gaps

• The presence or absence of fair value gap expansion determines whether price will continue higher or lower.

• Existing fair value gaps guide trade targets, while new ones indicate potential entry points.

• Fair value gaps play a crucial role in creating expansion phases.

New Section

This section emphasizes the importance of fair value gaps in understanding market bias and making informed trading decisions.

Market Bias and Informed Trading Decisions

• Fair value gaps provide valuable insights into market bias.

• Understanding fair value gap patterns helps make informed trading decisions.

• Following fair value gaps leads to successful trades.

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This section summarizes the key points discussed throughout the video, highlighting the significance of fair value gaps in understanding various trading concepts.

Summary: Importance of Fair Value Gaps

• Fair value gaps encompass and explain various trading concepts.

• Studying fair value gaps alone provides a comprehensive understanding of market dynamics

New Section

In this section, the speaker emphasizes the importance of simplicity in trading concepts and encourages listeners to focus on one single concept that incorporates all other concepts. The speaker also discusses the need for trust and successful application of trading strategies.

Mastery in Trading

• The speaker highlights that mastery in trading is achieved when all concepts can be turned into one single concept.

• Every concept mentioned by the speaker is already incorporated into this single concept.

• Overcomplicating trading strategies is unnecessary and can make it more difficult to succeed.

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In this section, the speaker discusses how traders often enter trades based on complex indicators or patterns but end up trading into a simple concept. The importance of not overcomplicating trading strategies is emphasized.

Simplifying Trading Strategies

• Traders sometimes enter trades based on fancy indicators or patterns but end up trading into a simple concept like a fair value gap.

• Overcomplicating trading strategies is unnecessary and can lead to confusion and difficulty in achieving success.

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In this section, the speaker reiterates the importance of not overcomplicating trading strategies. They emphasize that simplicity is key and encourage listeners to focus on what works for them.

Avoiding Overcomplication

• Traders should avoid making their trading strategies overly complicated.

• It is important to find what works for each individual trader.

• Trusting oneself and sticking to a simplified approach can lead to better results.

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In this section, the speaker emphasizes the importance of gaining trust through practical application of trading strategies. They mention their own financial gains as an example but highlight that profitability comes from being a good mentor and teacher.

Gaining Trust and Profitability

• The speaker shares their personal financial gains to gain trust and demonstrate the effectiveness of their trading strategies.

• However, they emphasize that profitability comes from being a good mentor and teacher, not just showing profits.

• Students should focus on applying the teachings successfully rather than solely relying on the mentor's profits.

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In this section, the speaker discusses the importance of trusting mentors based on their students' success. They caution against blindly following mentors who may not have successful students.

Trusting Mentors

• It is important to pay attention to a mentor's students and whether they are able to apply the teachings successfully.

• Seeing a mentor's profits may give hope but does not guarantee individual profitability.

• Choosing a mentor requires careful consideration and commitment to learning from them without getting distracted by other concepts or mentors.

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In this section, the speaker explains how certain concepts are already incorporated into their trading plan. They encourage listeners to focus on studying the outlined concepts rather than getting distracted by unnecessary information.

Incorporating Concepts in Trading Plan

• The fair value gap concept already incorporates the power of three concept in the speaker's trading plan.

• Traders should focus on studying and understanding the outlined concepts rather than studying everything mentioned by various mentors.

• Unnecessary distractions can disrupt the mechanics of a trading plan.

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In this section, the speaker further explains how certain concepts are already incorporated into their trading plan. They emphasize that traders do not need to study these concepts separately but should focus on studying what is outlined by them.

Understanding Power of Three

• The power of three concept is already included in the fair value gap concept within the trading plan.

• Traders do not need to study power of three separately as it is already accounted for in the trading plan.

• The speaker encourages traders to focus on studying the outlined concepts and not get distracted by unnecessary information.

New Section

In this section, the speaker emphasizes the importance of being a good student and following their teachings. They advise against getting distracted by other mentors if they choose to follow someone else.

Being a Good Student

• Traders should strive to be good students and follow the teachings of their chosen mentor.

• Getting distracted by other mentors or concepts can hinder learning and success.

• If choosing another mentor, it is important to give them full attention without getting distracted by concepts taught by other mentors.

New Section

In this section, the speaker explains how certain concepts like fair value gap and power of three are interconnected. They caution against mixing different mentors' teachings that may overlap with their own concepts.

Interconnected Concepts

• The fair value gap concept already incorporates the power of three concept.

• Mixing different mentors' teachings that overlap with each other can disrupt the mechanics of a trading plan.

• Traders should avoid getting confused by conflicting information and stick to one mentor's teachings for better consistency.

New Section

In this section, the speaker shares their thought process behind incorporating power of three into trading strategies. They explain how certain movements indicate relevant entry points without needing additional information.

Power of Three Thought Process

• A power of three movement throughout the day involves an initial move higher followed by a continuation lower.

• The only relevant factor is identifying where we are moving lower from, which is indicated by a premium array or fair value gap.

• Unnecessary details like midnight opens or initial moves higher are irrelevant when focusing on the fair value gap concept.

New Section

In this section, the speaker explains why power of three may not always work and how it is already accounted for in their trading plan. They emphasize that traders do not need to study these concepts separately.

Power of Three Limitations

• Power of three may not work when coming off a fair value gap as it does not need to move higher anymore.

• The speaker considers power of three irrelevant because it is already incorporated into their trading plan.

• Traders should focus on studying the outlined concepts rather than studying power of three separately.

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In this section, the speaker advises listeners to stick to their teachings and delete social media for better results. They highlight that social media is only beneficial for creators, not consumers.

Sticking to Teachings and Avoiding Social Media

• Traders should stick to the speaker's teachings and avoid getting distracted by other sources or mentors.

• Deleting social media can eliminate unnecessary distractions and improve focus on learning and applying trading strategies.

• Social media is only beneficial for creators who want to share their teachings, but for consumers, there is nothing special about it.

New Section

In this final section, the speaker emphasizes that they are in this journey together with the listeners. They encourage listeners to filter out those who are only interested in shiny objects and assure them that following their teachings will lead to results.

Journey Together

• The speaker assures listeners that they are all in this journey together.

• Filtering out those who are only interested in shiny objects helps identify genuine individuals committed to learning.

• Following the speaker's teachings will lead to results without a doubt.