FVGs are defined as specific ranges in price delivery where a disparity in market liquidity is observed, often accompanied by a Liquidity Void in the same price range.
This creates a gap, indicating a vacuum in trading activity.
2. FVG Formation:
Recognizable in a three-candle sequence on a price chart, an FVG is identified by a large central candle surrounded by smaller candles that do not fully overlap its range, signalling a swift market move.
Liquidity can be categorized into two primary types:
External and Internal
Each type plays a unique role in how the markets move and are essential concepts for any trader to grasp.
External liquidity is essentially the liquidity that exists above and below the old highs and lows.
These are the areas where the market has previously established significant price levels, and as a result, traders often place stop orders around these points.
In this thread I will run through a simple trading strategy, I've been profitable with, that I think anyone can learn and be consistent with their execution.
This will be very much a intermediate level thread and may require some prior PA understanding!
🔖CONCEPT
Idea being that above old highs & old lows we have resting liquidity in the form of buy-stops & sell-stops.
When a Daily Range is formed, the next day has the potential to purge either side of that range - offering a key raid trade.