Fair Value Gap 101
I’m Meta Matt, Director of Education and welcome to PB University LITE! This is a 50 Class Trading 101 Series geared towards both new and veteran traders alike! We go over everything from Trading Psychology, Technical Analysis, and Options Trading to Commodity Trading, Forex, and more!! This 50 Class series is not designed be taken in order, it is instead designed for traders to browse and pick which classes interest them. I will include the list of classes at the bottom of this page.
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How To Draw Out A Fair Value Gap (FVG)
Step 1: Find a big move up/down that consists of 3 candles (ideally) going in the same direction, with the middle one having a big move (body-to-wick ratio around 70%) up/down forming a gap between the wicks of the 1st & 2nd candles.
For Big Moves Up
Step 2: Draw a Horizontal line at the HIGH of the candle prior to the big candle
Step 3: Draw a Horizontal line at the LOW of the candle after the big candle.
For Big Moves Down
Step 2: Draw a Horizontal line at the LOW of the candle prior to the big candle
Step 3: Draw a Horizontal line at the HIGH of the candle after the big candle
What Is Fair Value Gap (FVG)?
The Fair Value Gap is used to detect market inefficiencies or imbalances.
The idea is that the market will eventually come back to these imbalances in the market before continuing in the same direction as the initial impulse move.
This is very similar to Supply and Demand Zones
Traders can use these levels to determine entry and exit levels
PB University LITE Class List
1) Trading Terminology
2) Stock Market Indices
3) Common, Preferred, and Penny Stocks
4) Diversification of Assets
5) Fundamental Analysis Made Easy
6) Technical Analysis Made Easy
7) Risk Management In The Market
8) Portfolio Management
9) How To Follow Market News
10) Trading Psychology
11) Options Explained
12) The Greeks In Options Trading
13) How To Short Sell Options
14) Covered CALLS
15) Spread Trading
16) Online Brokers for Options Trading
17) Implied Volatility Calculators & Tools
18) Protective PUTS
19) Iron Condors
20) Straddles
21) Reading Level 2
22) Taxes
23) Trading Psychology Techniques
24) The Art Of Trading
25) Becoming A Jedi In The Stock Market
26) Futures Trading Explained
27) Commodity Trading 101
28) Regulatory Environments
29) How To Become A Millionaire
30) $100K In 100 Days
31) Wash Sale Rule
32) Behavioral Finance Part 1
33) Behavioral Finance Part 2
34) 5 Charting Indicators
35) Fair Value Gap
36) Insider Trading and Market Manipulation
37) Stock Chart Types
38) Moving Averages 101
39) Base vs Precious Metals
40) Electricity Trading 101
41) Trading Brokers 101
42) 5 Trading Strategies
43) 85% Trading Rule
44) Are Win Rates A Scam?
45) Futures Trading 101
46) ATR Indicator Strategy With The Greeks
47) MACD Indicator 101
48) Bollinger Bands Indicator 101
49) Wedges, Triangles, Flags and Pennants
50) RSI Divergence 101
