In this livestream-style video, trader Kai Davis provides a step‑by‑step walkthrough of his morning market analysis and two key trades. He begins by establishing a higher‑timeframe (daily, 4‑hour, 1‑hour) bias, emphasizing the importance of respecting multiple fair‑value gaps (FVGs) across timeframes before committing to a position. He then describes a liquidity‑sweep scenario where a 1‑hour bullish FVG is cleared, prompting a neutral‑to‑bullish bias shift and a rapid upward move. Although a clean pull‑back entry was missed, he later takes an aggressive long trade with a tight breakeven stop, which ultimately closes at breakeven. The second trade involves a bearish SMT (smart‑money‑type) divergence between NASDAQ and the S&P 500 (ES), a strong displacement candle, and a 1‑minute bullish FVG that flips to a short opportunity. He missed this short due to being away from his phone, but explains why the setup was high‑probability, outlines a 1:2 risk‑to‑reward target, and notes the trade’s full run down the chart. Throughout, Davis stresses disciplined risk management, the reality of occasional missed winners, and the value of the strategy of using FVGs and liquidity sweeps. He concludes by promoting his free trading website (thetradingwebsite.com) for viewers to access his full trade logs.
Chapters
What is up? Welcome back to the second YouTube channel. I'm currently traveling, but we are not stopping trading. Yesterday I caught an amazing winning trade, and today there was two great trades to catch in my opinion. Let's jump in straight into this trading deep dive and this full trade recap. Now firstly, and very, very importantly, let's start and talk about the higher time frame analysis and the daily bias, because today was could have been a bit more trickier, especially for the newer trader. So if we are looking before market open here, if we go to the higher time frame, in my opinion, it's actually a bit more tricky to get a stronger higher time frame narrative and a higher time frame bias because we're respecting this 4-hour LFVG, we're respecting this 4-hour bullish fair value gap. Okay, so we're already respecting multiple time frame fair value gaps. We are respecting this bullish fair value gap. We were respecting this bearish fair value gap. We inverse this at 10 AM, so obviously we cannot see this candle close yet at the time that I'm seeing it, like in this replay. So basically, we have— we were just respecting lots of different fair value gaps on lots of different higher time frames, and we hadn't really inverse anything that meant a lot to us at this moment. So the way that I said that I was going to play this is just wait for a reaction from somewhere. So at the start of the stream when the stream started, I said, look, we've just embarrassed this 1-hour bullish fair value gap. For example, let me move this out the way. So I said, yeah, look, we've just— sorry, we've just swept this sell-side liquidity which was on the 1-hour and the 15-minute on most of the time frames. So we swept this low perfectly. So I said, yes, our bias is neutral right now, but if we was to get a move up now, it would make sense for our bias to be bullish because we have just swept the low. So that is literally exactly what happens. We get this big move up. Now there's nothing to necessarily do right here. When we get this big move up, we can see, look, we've swept outside liquidity perfectly there. Now we get this big bullish move up, we get this retracement. A very, very, very, very clean trade here would have been if we get a— if we got a fair value gap here, that would have been embossed. That would have been a no-brainer entry, but sadly we did not get a trade there. So just look out for that in the future. We get a big move up following our bias now because our bias is bullish because we've got this reaction. We create this pullback. A lot of this time, this pullback is going to create a bearish FBG, and then that is where you get your entry. That is an amazing strategy. Just off that strategy alone, you can make a lot of money. So right here, we're just coming up, we're coming up, we're coming up. We have this 1-hour high, for example, right there. We have this 1-hour high. And for our bias to be bullish as well, we also want to get a 1-hour candle close above this bearish value gap. Obviously Now we know that it happens, and at the time we, we wanted it to happen. So we're just pumping up right now. It's now— it's 10 AM, there's still nothing to take out, no trades to take. A very low quality long position, which again, I'm not really interested in taking any, any shorts right there. We get our first potential play right here. I've actually skipped past it. So this was the first place. Remember, the daily bias is bullish. We have this— well, we've already swept this 1-hour high there, but we have this high time frame highs And remember, number one rule in trading, guys, just because we sweep a high or a low does not mean that our bias changes. We need to see a, some sort of reaction and confirmation. So yes, we swept that 1-hour high there. Does that mean my bias is now going to be bearish? No, I need more of a reason. I need a reason for my bias to change. So for that reason, it hasn't changed. I'm still bullish. We get this retracement, it Exactly like what we wanted here. We just didn't get the trade. So we got the retracement. Now we're short at the fair value gap. This was quite an aggressive entry here, but a very nice displacement. We are respecting some fair value gaps to the— are we respecting fair value gaps to the left? I believe we were on high time frame. Maybe, yeah, high time frame. So we're expecting that 5-minute bullish FVG right there. So that was being respected. Then we came up strong displacement, and burst this 2-minute FVG. And then of course, this is where we entered into the long position. Now with this long position, I had a very, very, very aggressive breakeven point. I believe this was my breakeven point, or potentially— yeah, so this was definitely my breakeven point there. A very aggressive breakeven point. Again, just playing it safe here. I really like LUNGZ. My daily bias is bullish, so I just, yeah, that was my, that was my breakeven point right there. And as you can see, it got hit, and this was just sadly a breakeven trade entering on that candle close above the FBG. In my opinion, very simple trade to take. A lot of people took it. Nice displacement above a 2-minute, respecting a 5-minute. We have the, the daily bias being bullish and some higher time frame targets that have not been swept yet. So that was a breakeven trade. Now this is very important, and this is So let's meet this— oh, these are good. Never mind, we're good. This was the, the trade, the trade of the day from the outcome. So as you can see right here, we get this bullish fair value gap. We've just swept this high. As well as us just sweeping this high, we have a bearish SMT with— on the high time frame, on the 15-minute time frame with the S&P 500, because we've came up, swept all these highs on NASDAQ, failed to sweep these highs on ES. So we have this big, big bearish SMT. We create this 1-minute bullish fair value gap. The only way that I would be interested in short positions right here is if we have a big displacement candle close below this bullish FVG. Okay, you see, we get this big bearish candle close below this bullish fair value gap. Now, to take shorts here, this would be your breakeven point. Now this trade right here, I know some of you probably didn't take this trade because you're thinking, damn, look how close this breakeven point is, this is going to get hit most of the time, which is true and it does happen sometimes. But never avoid taking a trade just because the breakeven point, you think it's going to get hit super quickly, okay? The reason being is, yes, this trade a lot of the time will be a breakeven trade, guys. This just will be a breakeven trade. There's no other way to put it. A lot of the times this trade will not be a losing trade. This trade will either be a really good winning trade, or this trade will be a breakeven trade most of the time. Of course it could lose, so just with that in mind, you just have to be disciplined and you have to be okay with taking losses. So with this context, bearish SMT, very strong displacement, 1-minute only inversion with that crazy displacement, and which is extremely important, we are so correlated with ES. We also have a bit of trendline liquidity there in ES. So the context here is great. If I was to take this short here, I would put my take profits at this low. The only reason why I didn't personally catch this short, and on stream I said this was a good short to take, was just because I'm currently in Thailand trading from my phone and I just missed this. I closed my phone after I took this long breakeven trade. I closed my phone right there, then less than a minute later we got this crazy displacement candle and I just wasn't ready, and then we instantly came shooting down. So sadly I did miss out on this trade right here. This is a trade that I 100% should be taking, and I know I would take if I was at my usual setup, which is just— it's one of those. I'm not, I'm not angry or anything like that. That's part of trading. You can't catch all of the winning trades, sadly. But nonetheless, that is irrelevant. You still need to know why this is a good trade to take so you can make sure that you're capitalizing on it in the future. So this is where I would have took most my profits, just because it's a nice 1:2 risk to reward or I would have trailed my take profit down, definitely shaved some off at least at this low. And then yeah, I mean, this trade just ended up running literally all the way down there. And yeah, that was the end of the trading session. I hope you guys enjoyed this trade recap. Remember, I have my full free trading website out. If you want to go and view my trading website, search thetradingwebsite.com, completely free. Have a look, have a check it out, and I will see you on the next video. Let's go!
