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What’s going on, guys? So, I’m going to go over how I like playing fair value gaps. Um, it’s pretty simple. I’m going to give you an example from this uh this past Friday and it’s super easy. And I’ll give you a couple other ways I like to play reversals as well. Before I get into that, we stream live every day 10:30 till noon, 2:00 p.m. to 4:30. And if you want to support the stream, use coupon code Cove Trader. Also, in
The description of this video is a link to our free Discord if you want to join. And uh there’s also another uh Google Sheets thing that compares all the prop firms. That’s a pretty cool tool also. But let’s just jump into it. Basically, um I love love playing uh fair value gaps when we retest certain places. So, I’m going to show you an example. We’re on the five. I meant to go on the one. That’s my fault. So, we’re on the
One and basically you have this huge uptrend, right? You’re watching it and you’re saying, “Okay, when are we going to get a reversal?” Right? I’m looking for us to make a top, come down, bounce, make a lower high inside a fair value gap, and reject. Obviously, we don’t get that. We don’t get that. We still have higher highs, higher highs, higher highs. All of a sudden, we get right down pretty much the trend. There’s the moving average trend. Okay. Now, when
We get here, I’m waiting for that lower high and I’m waiting for us. You got this fair value gap right here. I want to see us trade into this fair value gap and reject out of it. And that’s where I’m looking to purchase. Sure enough, we get in. Your stop loss should be the high. So, say it’s 555. You get in. This is also looking good because you have Nice little bare flag there as well. So now you’re going into this
Fair value gap. I would buy as long as we hold the fair value gap at the minimum and you definitely don’t want to trade back over 55. I am taking this short. We took it short. We did this actually live on the stream and it was a perfect dumpky. And then what you do is as you’re going lower, you’re looking for the same thing. You’re looking to make a low, come back up, retest this fair value gap, which you’re testing right
Now, and then bounce out of it. Same concept. Down, down, down. You get a bounce lower like lower lows, lower lows. You bounce, you created this fair value gap, you hold it, and then you basically take it. Your stop could be the bottom of this fair value gap. Or if you want to go aggressive by having a bigger stop loss, you would put it at the bottom here. And then sure enough, what you do is you just kind of follow it
Up. So you were in, you’re long. Now you want to see this fair value gap hold. We’re holding. As you see, we’re closing at least above the 34 and you can see another flagged up consolidation up and now you’re just following it. Now you can put your stop loss here 476 and you would have gotten stopped out. So you would have taken that 60s something points and that’s kind of what I’m looking for. You can also just follow the 34. There’s
A lot of uh you know stop-loss follows you could do depending on how tight you want to be. In theory, you would target back up to this uh order block. And there you go. But being that I’m up 60 points and I play a mini, I am out. 60 points is way more than enough. That’s the problem. If you use accounts like Apex, if you use uh take profit trader, you can hold for bigger gains. But because I use some that
Have consistency rules, I can never hold for the larger gain. I typically take also if you have a trailing draw down in place, you’re looking to take the money off. But that’s pretty much how I play fair value gaps. I’m basically looking for a lower high into the fair value gap. Reject a fair value gap and drop. Same thing, higher low into a fair value gap. Come out of the fair value gap, hold it, and then you ride it high. And
That’s how you find tops and bottoms without guessing, without trying to catch a falling knife. Keep it clean. If you got questions about this, comment on the video or just ask in a Discord or come on our live
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