how can we accurately identify reversals in the market now there's a ton of different ways out there but today I'm going to be showing you guys my personal favorite which is a method using just for Valley gaps called impulse ships let's get right into it so what exactly is an Impulse shift let's take a look at the chart here and let's say this is a daily F valy Gap or any higher time frame point of interest for the matter so we have a higher time frame point of Interest right there let's say this is our
higher time frame context this higher time frame for Value Gap up towards this higher time frame swing high or swing low so for example this is what I call Push context essentially just internal to external range liquidity now how do we confirm a reversal out of that context well it's very simple all we would look for on the properly aligned time frame which we'll go over very soon is a fair value Gap displacing out of our higher time frame point of interest and that right there is your impulse ship now it's called an Impulse ship
because price is impulsively displacing out of this higher time frame point of interest it's wasting no time in here and the highest probability impul shifts will come in the form of v-shaped reversals typically with a fair value Gap displacing in although if it's not there it is not necessary for it to be a valid impulse shift ideally we just see a v-shaped reversal now the reason these impul shifts work is because we need to understand who is buying right here smart money we're trading smart money concept so we're looking at these levels for smart money
participation now when smart money participates these large financial institutions these hedge funds these big Market players with unfathomable sizes of capital when they enter the market they have such large orders that they displace price creating these fair value gaps creating these impulse shifts and if our goal is to align ourselves with smart money well we need to follow the display replacement we need to follow the fair value gaps that is shown right here via the impulse shift out of our higher time frame point of Interest so that impulse shift is smart money's footprint that they're
entering the market and we want to align ourselves with that so now the time frame alignments off of a monthly you're going to want to look for a daily fair value Gap off of a weekly you're going to want to look for a 4our fair value Gap off of a daily you're going to want to look for a 1H hour fair value Gap off of a 4H hour you're going to want to look for a 15minute fair fa value Gap off of a 1 hour you're going to want to look for a 5 minute fair
value Gap and finally off of a 15minute you're going to want to look for a 1 minute fair value Gap displacing away now to add on to this it doesn't just have to be out of a fair value Gap the examples I have right here are specifically push Contex which is just internal to external which is just the most frequently used and easiest and most high probability in my opinion but you could also use the impulse shifts out of other pdes for example swing lows or swing highs if you're looking for stop puns pivot context
is what I call that so you can use these impul shifts out of other types of context like pull or pivot which I will make a video on that soon just make sure you subscribe so you don't miss it now let's take a look at our first example here there are a few nuances you have to keep in mind when looking for impulse ships it's not as easy and simple as identifying a monthly for Value Gap and looking for a daily out of it and I'm going to show you why right here on the gold
monthly chart so here we have very clean push context just internal to external liquidity right there so we would look for a daily impulse shift right so here we are on the daily and let's just wait for that daily for Value Gap so we have one right here and we have another one created right here you would think all right we're now ready to be bullish we have our daily impulse shift we have now shifted from a sell program to a buy program you would be incorrect and here's why if you were to zoom up
one time frame going from the daily into the weekly what you'll see is a weekly fair value Gap resting right here this weekly fair value Gap puts price in a scenario called trapped order flow and that is when price is stuck between a higher time frame premium rate via the weekly F Val Gap and a higher time frame discount array via that monthly Fair valid Gap essentially just two reasons on a higher time frame basis for price to either continue pushing down off of that Weekly context or to continue pushing up off of that monthly
context So within that area price is 50/50 it's trapped in a cage and it doesn't have clear one-sidedness it doesn't have clear Direction so we can expect low probability conditions within that and any impulse shift we see into that Weekly Gap we don't want to trade it we don't trust it we want to see that Weekly fair value Gap get disrespected first showing that monthly has more strength than the weekly and then play the daily Fair Valley gaps that are formed above that Weekly F Val Gap so as you'll see these daily F Val gaps
both get completely disrespected and we knew to avoid them because we check the time frame that is above us for fair Valley gaps that are resting there because remember the higher the time frame the stronger the fair Valley gaps are going to be be we cannot just go from a monthly into a daily and completely ignore the weekly we have to look at all the time frames because they all work within and amongst each other so just because you have a monthly into a daily alignment does not mean you can skip the weekly take a
look at that Weekly make sure there's no FV Val Gap there that is going to cause you trapped order flow causing a reaction like this failing these daily for Value gaps right here because I know a lot of you would take these daily gaps and be wondering what the hell just happened why did we see that huge rejection and be completely blindsided because you didn't check the higher time frame and you didn't see that Weekly fair value Gap so always check the time frame above you for fair value gaps so now we would just wait
until price either disrespects this weekly or disrespects this monthly until then we are in trapped order flow 50/50 conditions in here you don't touch it so let's move forward in price and see when that displacement occurs and there finally we see that displacement above that Weekly Gap this is now disrespected you can delete that from your chart and we can see a daily fa valy Gap created right here now this is our high probability daily for Valley Gap our high probability impulse shift so what does this create creates new daily context new daily push context
and as you'll see we see a very nice push out of that high probability for Value Gap eventually taking the context highs so we have another example of gold monthly push context we would just look for a daily impulse shift so here's price finally tagging that monthly for Value Gap let's see when that daily for Value Gap gets created now as you'll notice we never get an impulsive Fair viy Gap displacing away there is a clear lack Fair Valley gaps which indicates low probability conditions so this right here is all price action we could have
avoided since we're just waiting for that daily impulse shift so let's continue moving forward see when that daily fa Valley Gap happens and it occurs right there now you'll see we kind of just displaced out of nowhere we didn't even sweep this previous week's low but what do we notice when we take a look at the closely correlated asset silver silver took a swing low over here on a higher time frame basis while gold did not that is known as a smt it's just a Divergence on swing lows or swing highs and we can use
that as a reason to look for an Impulse shift after that smt so we get that impul shift right here we have a daily fair value Gap get created and now we can confirm that price has shifted from a sell program into a bu program targeting these external range highs so let's just observe how this delivered and there is the monthly contacts complete after we got that daily inul shift so once you get that daily impulse shift you don't have to wait for for just the daily fair value Gap to get retraced into you can
also start looking for 4our fair value gaps all within here to play Within this monthly push context that is violated and from that 4 hour you can go into the 15minute time frame and then from that 15minute time frame you can go into the one minute time frame it's all fractal just keep on using the proper alignments and look for your impulse shifts there and here is yet another monthly example of push context on gold we're going to look for a daily impulse shift to confirm that price wants to start moving towards that month external
Range High right here so now let's move forward in price on The Daily and see when we get the daily Gap and we see it right there so we have a daily for Value Gap although it is closed in a breakaway Gap meaning the third candle has expanded and closed above the second candle's high so we don't expect price to retrace down into here so because we have a daily Breakaway Gap right here the protocol would be to go down one time frame into the 4H hour and in that third candle range which I have
marked here with this swing high and low we want to look for a bare valy gap which we can SP right here a 4H hour Fair Valley gap which shows price already has intention to want to push higher off of that now we don't see a very nice fall through off of that we create a low probability leg low probability because it does not have a fair value Gap in between the swing low to swing high so because of that we now have pivot context on the 4our meaning we can look for trade setups from
this swing low now targeting this swing high from this pivot to this pivot so if price were to come below the swing low we can look for a 15minute impulse shift to align ourselves with price to look for higher prices up towards this swing high and Beyond since we are within monthly context we would want to see a nice follow through above that so let's see what happens once price gets down there so here we are on the 15minute and price has just tagged that 4-Hour swing low we were watching now let's move forward in
price and see when that 15-minute impulse shift occurs as you see we are consolidating quite a bit and that's not what you want to see ideally ideally you want to see a v-shaped reversal out of that right just showing very strong intention in price coming in and out of a point of Interest so here we have price finally displacing higher and what we'll also notice is if we look at Silver which is again the closely correlated asset to Gold we can observe smt on the lows right here from That Swing Low to that swing low
and this relative swing low to That Swing Low over here we swept liquidity over here we didn't that's smt just a Divergence on the lows because of that smt this impulse shift is now high probability again regardless of this consolidation right here just like the example we went through on another gold and silver setup we had that consolidation we had the impulse shift but we observed smt with silver now this is a valid high probability impulse shift you can look to trade entries out of so there's your impulse shift how do we trade it because
this also not only serves as a way to identify reversals and confirm Market maker models it serves as an entry model so if you want to enter right off of the impulse shift you could enter at the high of that Gap you can play your stop loss at the swing low which creates that impulse shift and then from there you can just Target a static to R which would look something like this so let's see how that plays out and there is your plus two R off of a 15-minute impulse shift beautiful so moving a
bit more ahead in time here's that same gold daily chart as you can see price has done nothing but bag bag and bag if you have been waiting for those daily retracements you would have missed this whole move right here so remember what you can do is you can go down one time frame into the 4 hour and look at 4our context there look for 4our for Valley gaps for hour push context so let's go down into the 4our and we can spot a 4 hour for Value Gap right here in price which is what
we can use as context to look for higher prices out of now we can look for 15minute impulse shift so here we are on the 15-minute and let's see when that occurs here's a 15-minute Fair Valley Gap it is a breakaway Gap you never get that fill so you just wait for another Fair Valley Gap to get created then you get a new 15-minute Gap right there so let's take this a step further and now dive inside of this 15minute Fair Valley Gap right here and look for a 1 minute impulse shift because remember from
a 15-minute PD you can look for your 1 minute impulse shift so here we are on that 1 minute and now let's wait for that 1 minute fair value Gap displacing away and we see it occur right there so we can already look to enter at the low of that candle stop loss at the swing low which creates that impulse shift and then we can Target a static 2 R so let's see how this one played out I actually took this one so I do know how I played out and it was just a beautiful
trade from a monthly context down into a 4-Hour context down into a 15minute context down into a 1 minute entry let's move on to another example here we have the Euro CAD pair on the weekly chart we have a very clear orderflow leg right here from this swing High to this swing low with a fair Valley Gap in the middle signaling a bearish leg we want to look for lower prices here but we have a weekly Breakaway Gap right here because the way this third candle expanded below the second candle's low and closed aggressively below
it we want to be looking for daily fair value gaps now inside of this third candle's range to be able to play that for lower prices because we don't expect price to retrace to that Weekly Gap so here we are on the daily chart and we can see clear context right here clear daily push context from this F Valley gap down to this swing low right here we can look for a 1 hour impulse shift once price comes into this daily fair value Gap so now let's dive into the 1 hour and see when get
that so here's price singing into that daily for Value Gap and now let's see if we get the 1hour impulse shift which we do right there so we can Mark out that 1H hour for Valley Gap and if you're a swing Trader you can just take direct entries off of this Gap stop loss at the swing high or it could be the bodies as well it's more advanced stop loss that created that impulse shift and then Target a static to R right here and that would be your trade setup very simple so let's see how
this plays out there is price retracing into our Gap I'm going to take a simulated position right here obviously you can't be super accurate on trading view replay but entry would be in that 1 hour gap stop loss would be at the bodies right here that's where I would have personally put that and Target would be as we just mentioned a static to right there so let's see how this position ends up going and there is TP hit just a very clean trade daily into 1 hour impulse shift quite simple one so onto our next
example we are on the es 4our chart right here and we can see in price a 4H hour Breakaway Gap right here now we can go down into the 1H hour chart and look for a 1hour f value Gap to play up towards this high right there so here we have very clean 1hour push contacts with an overlapping level a very strong Confluence for price so in here we can look for a 5 minute impulse shift so here's the 5-minute chart and now let's wait for that impulse shift to be presented to us in price
and we see that impulse shift right there there is that 5 minute displacement signaling that institutional sponsorship behind this move so we can use this as an entry and set our limit order at the high of this fair value Gap stop loss could go at the swing low that created that Gap and Target a static 2 R which would put you right there so let's simulate a buy right here and just input that same order see how that plays out and there is your 2 r simple enough and for our final example we have a
little meme coin action right here yes it does work on Meme coins as well we are on Pepe usdt weekly chart and we can see extremely clear weekly push context from this Fair Valley Gap up towards that Weekly swing high so we're going to look for a 4-Hour impulse shift inside that Weekly Gap so there is price tapping that Weekly Gap now let's wait for that displacement see when that 4-Hour F Val Gap gets created which would signal price shifting from a sell program into a buy program and we see that 4-Hour displacement start to
occur right there let's wait for that third candle to close and we now have a confirmed 4-Hour impulse shift giving us an entry already so we can look to enter at the high of that Gap stop loss at the swing low that created the impulse shift and since this is a meme coin and these can run we're going to Target the external high right there for a nice near Six our trade here so let's see what this position is currently doing so this is current price action right now and it is well underway towards hitting
this external range Target let's remove this right here and just note a few things why was this such a clean move higher well whenever you see a fair Valley Gap created out of a previous F valy Gap right here those signal extremely strong Trends and very strong order flow this was likely to continue pushing higher once we saw this beautiful Fair Valley Gap off of a previous one and I do expect this right here to create a 4H hour gap within the next hour and 48 which it says right there and I would like to
see that hold and continue just sending price higher up towards that external high that context High Pepe is looking real good and that wraps up today's video if you have any further questions on this topic or any other topics for that matter let me know in the comments below or better yet join my free Discord where you can trade with me every week alongside a very like-minded community of individuals who are trading these very same cont Concepts and are willing to help out you can find the link for that in the description below this video
I will see you in there thank you so much for watching if you enjoyed it leave a like comment subscribe share with a friend who you think might also find this insightful and until the next one see you [Music]
