In this YouTube video, Kai Davis reviews four viewer-submitted trades to illustrate how to apply his 80% win‑rate Inversion Fair Value Gap (IFVG) strategy and to highlight common mistakes. He begins by explaining the IFVG concept—waiting for a bearish fair value gap to be “disrespected” by a bullish candle—and stresses the importance of high‑quality setups. For each trade he discusses the chart context (displacement, consolidation zones, sweep of higher‑timeframe highs/lows, size of the fair value gap), entry logic, stop‑loss placement, take‑profit levels, and risk‑to‑reward ratios. He praises trades that use clear sweeps, appropriate gap size, and proper risk management, while warning against entering during consolidation, using tiny gaps, or developing bad habits such as taking profits too early. Throughout, he advises adding higher‑timeframe bias, correlation with ES/NASDAQ, and daily bias to the analysis. The video also serves as a community call‑to‑action: viewers can post trades in his Discord for future reviews, and he promises more recap videos if the video reaches 100 likes. He ends with typical YouTube engagement prompts (subscribe, like, comment, ideas) and mentions his rapid channel growth.
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What is up? Welcome back to another video on this channel. In this video, I'm going to be reacting to some of my viewers' trades in the markets with the 80% win rate inversion fair value gap strategy, my own strategy that involves fair value gaps being disrespected. Now, this strategy, if you're taking the higher quality setups, has over an 80% win rate. And of course, I have over 38,000 members in my Discord community, so a lot of these members are going to be taking some of the wrong trades or maybe some of the amazing trades So this is why I'm doing this series, to hopefully show you guys some examples of good trades to take using the strategy and also some trades that you need to avoid. First of all, if you do want me to rate your setups and you are in the trading course or the livestream access, simply go to the Discord and post your trade setup and I will make another video in the future. If this video hits 100 likes, I'll keep posting trade recap videos where I go over all of your trades. So let me know in the comments if this is something that you want me to do. Also, you might be wondering where am I recording this video from right now. I'm in LA and I'm in bed because I don't feel like getting out of bed, so that is what the background currently is. So let's jump straight into it because that is what you can do when you're a profitable trader. You can work from absolutely anywhere, okay? First of all, let's look at trade number 1. Now right here we have of course an Inversion Fair Value Gap strategy. If you are completely new to the Inversion Fair Value Gap strategy, then And what we are basically waiting for is a bearish fair value gap, for example right here, to be disrespected. Now, all disrespected means simply means having a bullish candle close above the bearish fair value gap, exactly like this. But this right here is actually an example of a bad trade to take. Now, you might be wondering, why is this a bad trade to take? Because we have very strong displacement. If you don't know what displacement is, then displacement is simply when we get a large moving candle in one direction. So right here, as you can clearly see, we have some very strong displacement. But one of the most important things is that you're trading the right price action. Now what I mean by this is anybody can take a bad winning trade in the market, okay? This trade could easily have been in a winning trade and then nobody would have second-guessed it, in my opinion. Well, a lot of you guys wouldn't. But what a lot of traders actually do, and the reason why traders are unprofitable, is they will be blindsided by taking bad winning trades. So this is a bad winning trade because of this consolidation zone. Whenever price is consolidating, you do not want to enter into the market. It is bad price action to trade. Now, like I was saying, a lot of new traders would not care about this. They would enter into a long position right here, but the problem would actually be this trade, of course, can hit your take profit. And then what that gets you into, that gets you into bad habits. So well done for this trader for noting that it was a losing trade and posting this trade. Now hopefully you don't make the same mistake again, but this was simply a losing trade because we are chopping, we are consolidating, and whenever we are consolidating, you don't want to trade inside of that range. Other than that, you can see that you understand what you are doing. You have marked out this bullish fair value gap for context. As you can see, price is tapped into this bullish fair value gap right here. We have got the displacement up as well, which is very nice. But again, you always just want to be careful for this consolidation right here. But other than that, the displacement is nice, the context is nice. Trying to, try to analyze your chart a bit more, maybe look for a higher time frame sweep or a higher time frame reaction off a fair value gap or an SMT. Also, when you're posting these, try and add your daily bias as well because that so that does say a lot. And also add if ES is being correlated or not, because that is also another very important part about trading. Moving on to this second trade. Now, I actually made a TikTok video on this trade, so if it looks familiar, that is why. Now, this is actually a very, very clean trade in my opinion. We have this 15-minute high which has been swept. Now, this is all context. As you can see, this 15-minute high right there, it has been swept perfectly. What sweep means is we have came up, taken this 15-minute high right there, and then price action is coming down. Amazing that you have that marked on your chart. And again, using this higher time frame analysis to your advantage. Amazing. Now what else do we have? We also have this bullish fair value gap right here. Now this is where you've entered the short position from. As you can see, again, we have some nice displacement below this bullish fair value gap in the market. You've entered right there. Now your stop loss is only if we get a candle close back above this fair value gap, which is very good. Your first take profit I can see is right here. This is a nice take profit point. This is around a 1:1 risk to reward. Anything more than a 1:1 risk to reward, then you can start taking your profits. Now other than that, why is your second take profit here? Okay, unless you've taken profits at this unmitigated fair value gap, then fair enough. But in my opinion, there is no reason to be taking profits on this move down. Other than if it is in these unmitigated fair value gaps. But then, in my opinion, what you should be doing instead of just taking profits when you see a big move down like this is try and take advantage of that. Because when we do see a very strong displacement like what we have here, a lot of the time it is an indication that price action wants to carry on going in that direction. Of course, that's not the case all of the time, but displacement is very, very useful. So in my opinion, what you could have done here instead of just taking your profits is trail your stop loss. So your stop loss is right here. Your stop loss is at break even at this point, of course, because when you first take your first take profit, you move your stop to break even. Then instead of taking profits here and exiting your position when we tap into this 5-hour gap, simply move your stop loss all the way down to, let's say, here where you were going to take profit. Now what this does is this allows you to take so much more profit down here just in case price action does want to come down. And then if price doesn't want to come down, but then price can simply come back up, take you to, take you to your original take profit, and that's a good— you win a win-win situation anyway. But everything that I just said is kind of irrelevant because, well, it's not irrelevant, of course that is very good, but what I mean by that is I actually would not enter into this trade. The reason being this fair value gap is just too small. Everything that I just said would have made perfect sense if this was just a bigger fair value gap. In my opinion, this is just way too small of a fair value gap to enter into. And like I said on the last clip, just because the trade has worked perfectly doesn't necessarily mean that it is a better trade to take. And you do not want to get into habits of taking these lower and smaller fair value gaps in the market because they will simply just not work as much in the long run. So please be careful with that. Ideally, you wanted to get a fair value gap around this size. and then you enter the stop loss right here, and then that would be perfect. But overall, very nice context. Just please be careful for these smaller fair value gaps. Okay, moving on. Let's look at this trade right here. Now I think this is actually from the same person, so well done for doing so much, um, trading. And this right here is beautiful. This is an amazing trade. As you can see, we got the 15-minute unmitigated fair value gap. We have tapped into this 15-minute unmitigated fair value gap again, and Adding the higher time frame context to your trades is amazing. Tapped into the 15-minute unmitigated right there, perfect. Then what do we do? You are also noticing that we have this sweep on sell side liquidity. What I would also note here is I think we had— I think we've swept this low, which means that we tapped back into this bullish fair value gap. I might be wrong about that, it's obviously hard to tell without drawing the lines. Um, but one thing that I do see you not really doing is make sure that you are also marking out ES as well as NASDAQ. Okay, that is very, very important. So as long as you are adding ES as well, and then you'll be— then you're good to go. Now what is very, very, very, very nice right here is we have a single fair value gap. That is very important. This right here is on the 1-minute time frame, the best time frame to trade with the best risk to reward and the best risk management. As you can see, we We have swept the sell side liquidity, we've got the strong reaction up. You've waited for this bearish fair value gap to be inverse. This is where you enter. Most people would get stopped out on trades like this right here because they have a manual stop loss. As you know, with my strategy, I only wait for a fair value gap to close below this range, and that is where we get out of the trade. A beautiful, beautiful breakeven point at this internal liquidity, and then your take profit at the swing high. Overall, that is an absolutely amazing trade. Keep taking this exact trade in the market and you will make a lot and a lot of money. Moving on to the final trade that we will be looking at, and this trade right here— if it lets me zoom out— which trade do we have? Let's have a look at this trade. Okay, now I'm not quite sure what AL means. I assume that is some sort of higher time frame liquidity level, So let's just say it is. We've set this higher time frame liquidity level, um, we've got this move up. Now as you guys know, whenever we move up like this, you're going to find it hard to catch inversions from fair value gaps to the left simply because there is so many fair value gaps to the left. So what we need to do when we come down so much and so fast, like right there where I'm drawing, you need to wait for price to come up and then retrace down, and then that is where you're going to look for your long positions. That's where you'll get your best chances to enter. And that is exactly what's happened to here. As you can see, swept sell-side liquidity, started to get a move up. We did not get an entry there. We carried on moving up. We came back down, tapped into this bullish fair value gap for extra context. Then the same problem again. Do you see the problem here? The only reason why this is not a clean trade— just look at how tiny that fair value gap is. It's just way too small. You can't be taking trades off of these tiny, tiny fair value gaps because because you'll just get yourself into bad habits. Okay, this context is amazing. This is the exact type of trade that you want to be looking for. Stop loss to break even, perfect point. Take profit, nice. Also hold to those equal highs, perfect. But again, just don't get into bad habits of entering into these small fair value gaps because in the long run it just will not be beneficial. But again, if we got a big fair value gap there and a retracement like this Perfect entry. Um, yeah, that'll be that for this reaction video. Let me know in the comments if you enjoyed this by typing a smiley face if you watched it all the way to the end. I hope you did enjoy. If you want more videos like this, again, subscribe, like. This YouTube channel has only been going for less than a week. We are nearly on 1,000 subscribers, so keep subscribing, notifications on. I will keep pumping out these videos for you. I've never got so much good feedback from a YouTube channel and YouTube videos, so I appreciate it. And also leave me a— leave me some YouTube ideas because I'm posting daily and I want to keep posting daily. Leave me some YouTube ideas, and if I use your idea, I'll give away a funded account to one of you. I'll see you all in the next video. Subscribe. All the links are in my bio. Make sure you have a look. Let's go.
