In this solo trade‑recap video, Kai Davis walks viewers through a single winning trade executed on Monday, illustrating his systematic approach to trade selection and management. He begins by explaining why higher‑timeframe (daily) conditions are quiet, prompting a shift to the 4‑hour chart to locate a bullish fair‑value gap (FVG) that has already been inversed. He then scans lower timeframes (15‑minute, 5‑minute, 3‑minute) for liquidity draws, equal highs, and internal liquidity sweeps, highlighting contributions from a Discord community member. Throughout the analysis he emphasizes the importance of waiting for a fair‑value gap to be "embossed" (validated by price action) before entering. When a suitable bearish FVG fails to emboss, he discards the long setup. He later identifies a smaller bearish 5‑hour gap that has been swept, but decides against a trade due to Monday‑morning caution and insufficient confirmation. The core of the video focuses on liquidity concepts: internal vs. external liquidity, draws on liquidity, and the SMT (swept market taker) event where a high on the ES contract is swept but not on NASDAQ. He explains how these liquidity zones become break‑even points and profit targets. When a bullish FVG finally forms with a strong displacement candle, he outlines an aggressive short entry: entry at the break‑even point, stop‑loss triggered only by a candle closing above the bullish FVG, and take‑profit at the next external liquidity level, yielding an excellent risk‑to‑reward ratio. Interspersed are personal asides—recording from a family villa pool, a sponsor shout‑out, and reminders to join his daily livestreams and Discord community. He concludes by urging viewers to comment, subscribe, and like the video if they found the recap useful, promising more such analyses in the future.
Chapters
This is going to be a full trade breakdown of this winning trade that I caught today, and realistically, you should be catching the same trades. Now, first of all, before we get set off into the Discord, link in bio, okay? I livestream daily. The links are in my bio. You do not want to miss them. And to be completely honest, when we don't have much going on on the higher time frames, especially the daily time frame, it it's hard to catch nice trades on the lower time frames unless you are a newer trader. Especially, you will find it harder to trade these market conditions. So right now, this daily time, we've not inversed anything very recently. So what we have to do is drop to the 4-hour. Now, you can see we have this bullish fair value gap. Now, this bullish fair value gap has been inversed. What this means is we have a bearish candle close below this our 5-hour gap. What you also want to do, if the daily— even on the 15-minute time frame, we have some more recent draw on liquidity being— that higher time frame tells us is that we have lots of draws on liquidity below that we might want to target. Now equal highs, which I said on stream could be— actually, shout out to Adam, he noticed these equal highs and let me know, and I seen them and I said, yeah, wow, they should be a very nice strong liquidity. Hopefully at open we can get some sort of long position and target these 5-minute equal highs. But if we play price action out, as you can see here, we kind of just shot straight up. And when we do that, you have not missed the move, nothing bad has happened. There just simply has not been a trade to catch. So there wasn't any trades right there. A lot of unprofitable traders will see this and think, wow, we've just moved up so quickly, there must have been some sort of trade. There wasn't. Then we get this move down again. There's no short positions to catch on this move down. What you want to happen for a long position or for a short position right here is internal liquidity being swept and being created. So we— for a long position, for example, you want price to come up, come down, create a bearish fair value gap here. Then this is going to be your leverage point. This is where you're going to get and attack the market. We wait for this bearish fair value gap to be embossed. Then this is where this high is now your internal liquidity point, also your breakeven point. You enter here, breakeven point there, and then you hope you ride the trade to buy side liquidity which will be your take profit. Now that would have been perfect for a long position scenario, but guess what? We did not get a long position scenario. If we play the price action out, there was no potential long positions here. We had this low quality bearish fair value gap. The reason why this wasn't a good position to take right here is this bearish fair value gap. Let me zoom in here. Well, this fair value gap didn't emboss. That's why it's not a good position to take. But let's keep playing it because I believe— yeah, here we go. We have this smaller bearish 5-hour gap. We just swept south side liquidity. We have a candle close above it. We also inverse the 5-hour gap on ES. I believe the reason why I would not take any trades here was one, it's a Monday morning. On Monday mornings, I usually, and most of the time, I'm only taking the higher quality setups. And when we don't have the high quality setups, I, I'm just a bit more cautious. Let's check the higher time frame here. The 3-minute timeframe, the 4-minute timeframe, if it loads. I am currently in the swimming pool, as you can tell by the background. My family, right now I'm on a family, I booked out a family massive villa, and all my family are in the kitchen getting some food, so I thought I would come up here and record this quick video in the swimming pool area. Shout out to Tradon allowing me to do this, absolutely crazy. Well, I already know that you're learning how to trade because you're watching this video, but stick to it, guys. The, the possibilities are endless with trading. Anyway, back to this long position. We're just not really respecting anywhere for this long position. We've inverses bullish 5-hour U-GAP. We're getting a bit of chop, a bit of consolidation here. As you can see, price is a bit choppy for long positions. I would just prefer something a lot more clearer, and I think a lot of people in my Discord as well. That's why we wasn't taking long positions as well as the draw on liquidity. As you can remember, we had that very nice choice on liquidity below, which was a lot more interesting. So again, right here we just have to be more patient. We're very early into the session, just a lot of chop and a lot of consolidation. And then we move right here as well. So price ends up coming back up. I think my family about to come into the pool room, so if the video cuts out and starts again, that's why. But yeah, price action ends up coming up here. Now again, same thing for shorts. This could have been an extremely nice continuation short position. We inverse this, we inverse this bullish fair value gap— well, sorry, we don't inverse this bullish fair value gap, but if we get a candle close below this bullish fair value gap, this would have been amazing for continuation shorts. Because so yeah, we don't get the candle close below this bullish fair value gap. That would have been the perfect play for a continuation model just because we're very close to these strong draws on liquidity. So again, we just play the price action out. No trades yet, just got to be patient, got to be patient. Still waiting, absolutely nothing yet. And then look what happens, we get this retracement down. Now remember what I said earlier, it happens in a second. Sorry, yeah, that we get the small retracement up, it happens very quickly. We get this one candle up We failed to get this continuation play. We're patient. We get this bullish fair value gap. Now what you want to see with a trade like this is a nice size fair value gap. Ideally it would have been nicer if this fair value gap was a bit bigger. We have a very nice break-even point. This would be your break-even point here, a very aggressive break-even point. Now I would not enter into short positions here unless we had a nice candle close. So as you can see, we don't inverse this fair value gap. Even if we did inverse this bullish fair value gap with a candle close around where I've just drawn, I would still not enter into a short position. I would only enter into shorts here if we got this displacement candle. Now with this displacement candle, we are in a bit of consolidation and a bit of chop right now, so this is a more advanced play in my opinion. Now this would be the break-even point, a very aggressive break-even point. A lot of the time a trade like this will get stopped to break even because we're being so aggressive. The price action isn't necessarily in our favor. As well as that, which of course I have— should mention, is we had a bearish SMT. So we failed to sweep this high on NASDAQ, but we did sweep this high on ES. Oh, my camera just died. So we failed to sweep this high on NASDAQ, we did sweep it on ES, creating the SMT. We have very strong displacement we have an aggressive breakeven point. This is where we enter into the short position. Amazing risk to reward. Stop loss only if we get the candle close above this bullish fair value gap that we entered from. Take profit at this low here. The reason why it's this low, or even this unmitigated fair value gap, is because it's an amazing risk to reward. And then once we tap into these fair value gaps to the left, the price action could easily come up and end up retracing. We're not going for the glory and we're not being greedy with these lows all all the way down here. And yeah, an amazing risk-reward, a nice trade on Monday. And would you look what happened— price ends up retracing before we end up sweeping this external liquidity high. If you found this video useful and you want me to do more trade recaps, simply comment below, subscribe to this channel, like this video, and I will keep posting these videos. Very nice trade with the displacement. Make sure to join the daily live streams.
