Fair Value Gaps Part 2

Fair Value Gaps Part 2Lesson 2 of 65 min read

The tap is nothing

Price reaching your box is not a signal. The two things that count as a reaction, and what it looks like when there is none.

The first rule of entering on a gap is a rule about not entering.

Arriving is not reacting

Price trades into the box. That is the fill, and by itself it says nothing about what happens next.

Price can travel through the whole range and keep going. It happens often, and the gap you drew is then just a range price passed through on the way somewhere else.

Figure 1 · Two gold panels with the same box between 2,404 and 2,412: on the left price drops straight through it, on the right price fills it and closes back out above it

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