A bullish candle closing above a bearish fair value gap looks like a good entry, but it's a trap if price then taps another bearish gap. Wait for either no new gap or a gap that sits lower before you trade.
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Many traders would see that this is a winning trade and think that it is a good trade to take. But what if I told you, even though this happened to be an amazing trade in terms of risk to reward, this was actually a completely awful entry to take? And this is why. Now remember, when you are looking to enter into the markets, what you are waiting for is a bullish candle close above of a bearish fair value gap. As you can see right here, we get a bullish candle close above this bearish fair value gap. But the reason why this is an awful trade to take is because price action actually then comes into another bearish fair value gap. So what this means is now that we are tapped into this bearish fair value gap here, nobody knows if price will respect this fair value gap and come down for the lows or disrespect this fair value gap and go for the highs. Therefore, what you would want to happen is for us to simply not tap into another fair value gap. So you would want this fair value gap to either be a bit lower, or we have no fair value gap here, and then that is when you could enter into trades like this. If you want to learn more, I livestream daily. All of the links are in my bio.
