@peter_gianfx44: Fair Value Gaps (FVGs) are one of the most powerful concepts in Smart Money Concepts (SMC), yet most traders mark them incorrectly and wonder why price keeps stopping them out. The truth is simple: not every FVG is tradable. Here are the key rules for identifying and trading a valid FVG: 1️⃣ Understand What an FVG Is A Fair Value Gap is a three-candle imbalance created when price moves aggressively, leaving a gap between Candle 1 and Candle 3. This imbalance often becomes a magnet for price and can act as a high-probability reaction zone. 2️⃣ Look for Strong Displacement A valid FVG should be created by an aggressive displacement candle. Weak moves create weak imbalances. Strong moves show institutional participation and provide better trading opportunities. 3️⃣ The First FVG Matters Most The highest probability FVG is usually the first imbalance created by the displacement candle after a significant market shift. Later FVGs often lose effectiveness. 4️⃣ Avoid Mitigated FVGs Once price has already traded deeply into an FVG and reacted from it, the imbalance is considered mitigated. Mitigated FVGs generally offer lower probability setups compared to fresh, untouched imbalances. 5️⃣ Wait for Market Structure Shift Never trade an FVG in isolation. Look for a CHoCH (Change of Character) or market structure shift first. Structure provides the directional bias while the FVG provides the entry location. 6️⃣ Use Liquidity as Confirmation After the CHoCH, identify inducement liquidity such as equal highs, equal lows, a Higher Low (HL), or Lower High (LH). Let price sweep that liquidity before returning into the FVG. 7️⃣ Look for Rejection Inside the FVG The entry is not simply because price touched the FVG. Wait for a rejection, lower timeframe confirmation, or clear reaction showing that buyers or sellers are defending the imbalance. 8️⃣ Respect Higher Timeframe Bias A bullish FVG against a bearish higher timeframe trend is much weaker than a bullish FVG aligned with the overall market direction. Always trade with the higher timeframe narrative. 📈 Bullish Setup • Strong bullish displacement • CHoCH to the upside • Bullish FVG forms • Liquidity sweep occurs • Price returns and rejects the FVG • Target buy-side liquidity 📉 Bearish Setup • Strong bearish displacement • CHoCH to the downside • Bearish FVG forms • Liquidity sweep occurs • Price returns and rejects the FVG • Target sell-side liquidity 💡 Remember: An FVG is not a signal by itself. It becomes powerful when combined with market structure, liquidity, displacement, and higher timeframe bias. Master these principles and you'll stop treating every imbalance as an entry and start focusing only on the high-probability FVGs that professional traders look for. #forexkenya🇰🇪 #daytrading #trading #forex #smc

Peter_gianFX

Open In TikTok:

Region: KE

Wednesday 03 June 2026 16:28:40 GMT