In this YouTube trade recap, Kai Davis walks through a losing intraday trade taken on an FOMC day, using his IFVG (Imbalance Fair Value Gap) strategy across multiple timeframes. He begins by stating that despite the loss, the trade setup has an >80% win rate and should be taken whenever the confluences appear. He outlines his higher‑timeframe bias (bullish at all‑time highs), examines daily, 4‑hour, and 5‑minute charts for unmitigated fair‑value gaps, and explains why he refrains from short entries despite apparent bearish signals because his bias remains bullish. He then describes the formation of a bullish SMT, the respect of the 50% level of a daily fair‑value gap, and a series of unmitigated gaps on 1‑ to 5‑minute charts that together create a high‑probability long entry. He details his entry, stop‑loss (candle close below), breakeven target (tapping unmitigated gaps), and take‑profit ideas (swing high or next gap). After entering, the market chops, leading to a stop‑out just before the price reaches his breakeven level, which he frames as a learning moment about chop and disciplined exits. He concludes with a promotional plug for his daily Discord live streams, a paid trading course, and a call‑to‑action for comments and content suggestions.
Chapters
Today was finally the day I took my first losing trade in literally weeks and weeks and weeks on a FOMC day. And we are going to be doing a full trade recap on how you should have took the same loss in the markets. Because yes, guess what, we're trading. Even though this was a losing trade today, you should take this trade, in my opinion, every single time you see it. So the reason being, it has over an 80% win rate, and the confluences that I'm going to tell you about in a minute it was really a no-brainer trade to enter in my opinion. So let's jump straight into this video, starting off with our higher time frame analysis. Now of course, we dropped to the— we jumped to the high time frame. What do we notice? We're at all-time highs. A quick disclaimer: whenever we are at all-time highs, your bias should be bullish. It is as simple as that. Nobody knows when we're going to come down, if we are going to come down, or if we're just going to carry on, keep pushing up higher and higher and higher. Okay, nobody knows this, so all that you need to do is simply wait for price action to give you a reason to be bearish. If we go to the 4-hour time frame here, as you can see, the only reason that we had to be bearish was yesterday when we inverse this 4-hour bullish fair value gap, and that should have taken us down to at least an unmitigated fair value gap or some sort of drawn liquidity. As you can see, we had this unmitigated fair value gap, but now obviously we have tapped into it. So going into the— into today, I was just a bit more bullish than bearish. I knew that we had FOMC later in the day that starts at 2 PM. So with all of that information, this is how I traded today. We had this 50% of this daily zone which will come into effect later into the session. Okay. So this is what the price action looked like at open. We kind of just dropped, okay, not really any trades. Again, whenever stuff like this happens, you just have to be patient. We don't really get any trades, we're just slowly dropping down. Again, I'm not really interested in short positions because my daily bias is a bit more bullish than bearish, so there's no point me looking for long positions. Now even with this move up, okay, when you're looking to enter into long positions it is going to be quite difficult to enter into a long position like this because normally— I know this is not the best example, but normally there'll be loads of different fair value gaps here on lots of different time frames, so it'll be quite difficult to enter into any sort of trades. So for a long position like here, ideally you want to see a move down, bearish fair value gap, and a long position like this targeting the equal highs. Okay, that would be a best case scenario in a play like this. I know it doesn't happen here, but But just for the future, for example, here do you see how we've created this bearish fair value gap? If we came up and burst this, got an entry here, this would be a break-even point, and you targeted those highs for your take profit. This exact trade has such a high win rate, and I highly recommend you doing some more backtesting and forward testing in these sorts of trades because they work very, very well. Anyways, we get this move down. Now I'm pretty sure during this move down we get a potential short position, being this 5-minute time frame. So yeah, as you can see, we have— we've tapped into this 5-minute unmitigated bearish fair value gap here, and we've just embarrassed this 5-minute bullish fair value gap. We also have these lows down here, which actually are the London session lows. But again, I don't use session lows, so I don't care if this is a London low, Asia low, uh, whatever low it is. Do you know what I mean? I don't care what low it is. I normally care if it's a nice swing low, which yes, it is a nice swing low. But again, my bias is not bearish in a situation like this. Therefore, as much as this might look like a clean, clean play, I want these equal highs. I want the 15-minute equal highs. I want the all-time highs. I want price action to go up on the higher time frame. Therefore, I'm avoiding these short positions because it just doesn't follow my bias, and I'm not confident that these lows would get hit. If my bias was a bit more bearish and I noticed that we inverse all of these fair value gaps, then I would then I would 100% enter into a short position like this because the confluences are there. We had a bearish SMT, we're expecting the higher time frame bearish 5-hour gaps, we've embarrassed all the bullish 5-hour gaps. But again, for me, the context just wasn't there. I was a bit more bullish, or again, there wasn't really a nice 1-minute entry for me. Yeah, though the break-even point was nice, I just didn't have the, the confidence to enter into the short position. And I'm more than happy that I avoided this losing trade right here. But now this is where it gets interesting in my opinion, because as you can see, price action comes down, we sweep all these lows, we also create a bullish SMT. So we've swept all of these lows on— sorry, we've swept all these lows on NASDAQ, but we have not swept these lows on ES, creating this bullish SMT in the market. A bullish SMT simply means if we get a long position, that long position is more likely going to work, okay? And now look what happens. We create this bearish value gap. Now this is very important. And by the way, I hope you're not just watching these videos like it is Netflix because I'm giving you so much important information here. We tap this 50% of this daily fair value gap, okay? So remember, I went to the daily time frame earlier and I marked 50% of that fair value gap. And look what's happened. This wick has perfectly respected 50% of that fair value gap. This does not happen every single day. This will rarely, rarely happen. You always see me marking out the lower time frame fair value gaps. For example, this pink line, this is always 50% of a fair value gap. And as you know, if price action respects 50% of a fair value gap and we get a move from that 50% of the fair value gap, otherwise known as CE, then it is a very, very strong reaction, okay? Now the fact that we've respected 50% of the daily time frame is such a strong reason on why price action might want to be a bit more bullish. In my re— in my opinion, we get this reaction 50%, we have a bullish SMT, we inverse this bearish value up straight away with this 1-minute candle, an extremely nice candle close. Now this is where it gets even better. We go to the 2-minute time frame, we have an unmitigated We go to the 3-minute time frame, we have another unmitigated. A 4-minute time frame, another unmitigated fair value gap. And the 5-minute time frame, another unmitigated fair value gap. Now remember, unmitigated simply means a fair value gap that hasn't been tapped into yet, okay? Now let's go back to basics. What is a fair value gap? A fair value gap is simply where orders have not been filled yet. And where we have orders that haven't been filled yet, most of the time a fair value gap will get filled, okay? That is just a fact of how fair value gaps work. Most of our value gaps end up getting at least tapped into and filled. Okay, so because we've got this bullish candle close above this bearish fair value gap, 50% bullish SMT, bias is bearish. There is so many more— there's more than enough confluences for me to want to enter into longs here. Enter there, stop loss is only if I get a candle close below. My breakeven point is when we tap into these unmitigated fair value gaps. My take profit could be that this swing high here, it could also be at that unmitigated fair our buy gap. Very, very nice risk-reward, and in my opinion, overall a very, very clean trade to enter into. And we just get this chop here after. I mean, there's just nothing that we can do when we get chop, okay? An important lesson that you need to note is if you enter into the trade and it was not choppy— for example, here, price action was clearly not chopping, I entered into my long position here. After I enter, then we got the chop. There is nothing that you do can do, okay? Just because price starts consolidating and chopping here does not mean that I am randomly going to exit my position. I'm only going to exit once I get my bearish candle close below my inversion that I entered from, and that is where I exit. This is where I took my loss. An amazing candle close below the fair value gap, managed the risk amazingly. And as you can see, sadly, what happened straight after we got stopped out— price goes straight to where we were targeting for our breakeven point. But that is just trading, and in my opinion, I'm— well, I know I'm going to take this exact trade over and over and over, and it will make me a stupid amount of money. Okay, I live stream every single day in my Discord. I have over 250 people that watch me trade live on a daily basis. If you want to join the team, then all of my links are in my bio. Do not miss out on these live streams, and of course, just make sure you join the team. I've got my trading course in my bio as well. If you enjoyed this video, comment below so I know who really made it to the end of these videos, and let me know if you want me to make some different type of content other than trade recaps. I hope you enjoyed this video. I will see you all tomorrow for the next video. Let's go!
