Inverse Fair Value Gap

all right everybody in this video I will teach you the most powerful PD array that you can use to take your trads and I will also teach you a trading strategy or a trading model based around that PD array so the PDR that I'm going to talk about is called the inverse fair value Gap and it is powerful than auto block fair value Gap or breaker block this one has to be my favorite one because once it forms and once the pattern ERS you know the price is going to go into your direction most of the time so what exactly is a inverse fur value Gap and how you can trade it so first off I'll explain what an inverse Ro Gap is and later in the video I will teach you a trading strategy based around this um PD array so over here what you can see is that we had a breakout structure right so we have a lower low lower high and then a lower low now inside this lower low leg we will have a fair vality Gap so what is inverse fairity Gap whenever a fair value Gap is violated so in this case you can see we had this bearish fair value Gap after break of structure so we had a break of structure here we had a fair Val Gap here now once the candle closes above it right once the candle closes above the fair value Gap this fair value Gap becomes violated and it is no longer a fair value Gap but it becomes and inverse fair value Gap all right so similarly like support and resistance flips right whenever resistance becomes support and support become resistance similarly if a bearish r Gap is you know reclaimed like this and the body closes above it then that bearish fairity Gap becomes inverse Fair Gap or you can say a bullish Fair vality Gap so now you would simply take your entry on a retest right and then you can Target get your whatever Target is there I'll get later into that in the video okay and similarly if I flip the chart over you can see that we had a break of structure and we had a fair value Gap inside this leg so we had a higher high higher low and then a higher high and inside this fair value Gap you know normally you will try to take long but what happens when price closes below it and violates this fa value Gap right so this bullish F Val Gap was violated and the body close below it okay now once the body closes that's when the inverse fair value Gap forms so now on the retest you are going to take your entry and you're going to Target whatever sell side liquidity is resting below here now here are some examples so over here you can see that I have this chart and after break of structure we have this tiny fair value Gap over here you can see over here and price just violated it like that level look at this the body closed right below this fair value Gap now once that happens this bullish F value Gap becomes inverse fair value Gap or in easy words you can say the bullish Fair Gap flips into a bearish fair value Gap all right so this is now an inverse fair value Gap so now your entry would be on the retest and you could have targeted this inefficiency down here or a fair value Gap whatever you want to say over here you can see that in this example we take out sell side liquidity and afterwards what do we have or you could say we had a break of structure and we then had a fair value Gap just around here you can clearly see right a bearish fair value Gap but what happens price violates this fair value Gap it does not respect this fair value Gap and the candle closes above it now once the candle closes above it all you're simply doing is taking your entry on the retest now once you get your entry your first take profit could be here your second could be inside the this R Gap and your thir could be probably over here so very simple over here what do we have once again we take out sell side or you can say we had a break of structure and then we had this fair value Gap here but you can clearly see that it was violated and it was not respected and the body closed Above This Old Fairway Gap so now once the body closes this bearish fair value Gap becomes inverse fair value Gap and similarly would take your entry on the we test and you would take your first Target on this fair value Gap around here and your second take profit level could have been this over here so here is another example so you can see we had a break of structure and then we have this fair value Gap around here you can clearly see over here just around here and what happens price violates this Fair Val Gap and closes below it right here now once the candle closes this bullet bullish fair value Gap becomes inverse fair value Gap or you could say a bearish fair value Gap and you can see price went ahead and retested this level and you can see that the bodies were respected all right so bodies tell the story so your entry would have been here you could have taken your probably your first Target on this low low around here and your next Target could have been this low over here uh but yeah guys this is very very simple and uh let me let me teach you guys the trading strategy and then I will give you examples for that strategy as well all right everybody so here is a trading model or a trading strategy based around the inverse fala PD eror I have uploaded this strategy before on the channel but I'm going I'll go into more detail in this video so these are the rules of the strategy so after 2 a. m. New York time so remember 2: a.

m. that's when the Asian session ends right I'm not talking about the killone but the Asian session okay 2 a. m.

you have to look for any type of Market structure shift on the 5 minute time frame any Market structure shift okay it doesn't matter where it happens but you have to look for a market structure shift so over here you can see that we have a higher high higher low higher high and afterwards we have a market structure shift now here is the most important rule normally after market structure shift you will look to take your entry from the pr value Gap that is resting here or an auto block here but you have to wait for another sweep of this high so after market structure shift you have to wait for price to take out liquidity again that's going to be this high now once that happens you start look looking for a formation of inverse Fue gap on the 5 minute time frame so if I zoom in like that you can see that in this leg we had this fair value Gap so the most recent inverse fair value Gap you have to mark that out and you then have to wait for PR to close below it so once the candle closes that's when the inverse Gap forms you then simply take your entry on retest you go short like that you put your stop right above the high and you go for one:1 RIS reward ratio now this is going to have above 65 or 70% win rate if you stick to this rule of one to one okay so let me explain it again in case you missed you have to look for a market structure shift after 2 a. m. New York time once you get a market structure shift you wait for price to take out the liquidity once again the liquidity has to be this high right it can't be any liquidity but this high so we have a higher high higher low higher high right and then a market structure shift so price has to then take out the higher high after market structure shift this pattern look at this pattern and memorize it okay or keep watching this after market shift we have a sweep of the liquidity right once again and then we look for the most recent inverse Ro Gap that forms and then we wait for a entry on the we test and we target 1 to one or 1 to 1.

5 in most cases when your bias is strong and similarly if I flip the chart over you can see that after 2 a. m. what we do look for is a market structure shift on the 5 minute time frame so over here we have a market structure shift normally you would try to take your entry from the auto block or fly Gap from here but we then wait for another sweep that happens like that okay now once that happens all you're looking for is is a most recent inverse fair value Gap that forms so this fair value Gap right in this leg in this leg has to be violated once that is violated and the body closes Above This the fair Gap becomes inverse F Gap so you take your entry on the we test put your stop right below this slow and you go for one to one RoR wall so let me give give you guys some examples and then I will end the video all right so here is example number one I'm looking at your USD on the 5 minute time frame and at two this is when the Asian session ends so now I'm looking for any type of Market sh and you can see we have a higher high a higher low and then a higher high over here and afterwards if you look very closely we broke this structure so that is our Market structure shift with this lag now instead of taking my entry from this auto block I will wait for price to take out this high once again now once price takes out this high once again I keep marking the most inverse F value Gap and over here you can see that we have this fair value Gap and if I mark this out like that you can see that the body closed right below it so now this fair value Gap becomes inverse fair value Gap and my entry is going to be on the retest my stop would go right above this high and I would go for one:1 restor w ratio every single time but you can also go one to 1.

5 in this case I would have gone for 1 to 1. 5 because there was a clear inefficiency down here that I could have targeted and you can see that price came in right into it so very very simple let's move on to the next example now all right everybody so here is example number two I'm looking at Euro USD on the 5 minute once again and I highly suggest that you stick to Euro USD and gbpusd only for this strategy or you can stick to NAS 100 and S&P 500 so over here you can see that we have a lower low lower high and then a lower low and afterwards we have a market structure share shift here now a lot of people would try to go long from this fair value Gap right but notice what happens it was just rushed through it just broke through it so our rule was met after market structure shift we wait for price to take out this low once again and once this low is taken out we start looking for an inverse fair value Gap very important we have to start looking for an inverse Rue Gap so over here you can clearly see that we have have this beautiful F gap down here and if I mark this out like that you can clearly see that price closed above it so now that would have become your inverse fair value Gap here right and then entry on the retest you go for one:1 R reward ratio very very simple guys it's it's literally like like your bread and butter trading strategy that you can use now here are some key things to note after market structure shift so the fake Market structure shift whatever you want to call it and you have your like your fair value Gap marked out if you see like a big reaction of this like something like that then you you do not look for this setup because the move have move have has already be done right so you want to see like an instant break through this fair value Gap into this purge of this low I do not want to see price come into the fair value Gap and give me a push like this that's going to just invalidate the setup so I hope that makes sense but that's pretty much it you look for a market structure shift and once that market structure shift happens you look for a purge of the market structure shift lag low that happens right there afterwards you start looking look for a fair value Gap that forms and that or the most recent inverse Val Gap in this case we first Mark the fair value Gap and once the body closed Above This fair value Gap violating the bearish fair value Gap this fair value Gap becomes inverse for Gap and then our entry would be on the retest we target one 121 or 1 121. 5 considering the fact that our entry was here you could have targeted this fair value Gap over here giving you one to one at least and yeah guys uh let's me let me give you guys one more example and then I'll end the video all right everybody so here is another example so as you can see the Asian session ends at two so we then start looking for a market structure shift and over here what do we have we have a clear Market structure shift right now this is our auto block and normally a lot of people would try to go long from this auto block what I H what happened happens price takes out the low of the market structure shift lag and once that happens we start looking for inverse fair value Gap formation and you can clearly see that over here we have this tiny little fair value Gap just around here if I drag this along like that you can clearly see that the price violated that F Gap the bearish F Gap and once the body closed above it this F Gap become becomes inverse Rue Gap so my entry then would be on the retest of this my stop would go right below this low and I would go for one 121 and that was a beautiful take-profit level hit but there was a fair value Gap up there that you may have targeted now if you're if you're good with risk management you can do these type of experiments so that's what I'm given you 1.