Chapter 2 - lesson 6 Flashcards
What are the characteristics of a high probability FVG?
A high probability FVG will have a liquidity void or a real gap(volume imbalance) on a lower timeframe to the FVG timeframe.
What are the characteristics of a high probability order block?
A high probability order block will have imbalance left behind showing a true change in state of price delivery.
What is the difference between a FVG and a liquidity void?
Liquidity voids are imbalances that occur when there is only buyside or sell side offered. The candles typically will not have wicks.
A FVG occurs when there is both buyside and sellside price action offered.
A liquidity void becomes a FVG when price retraces back into the range.
What is a volume imbalance?
A volume imbalance occurs when there is a gap between candles. It typically occurs when price moves aggressively in 1 direction.
Volume imbalances are common on the 1 minute chart.
How do we want to see volume imbalances get traded into?
Volume imbalances should get traded into in the same manner that FVG’s and imbalances get traded into. The wick should move into the range of the imbalance, and then move in the opposite direction.
What’s significant about imbalances on the 5 or 15 minute?
It highlights an area of interest on lower timeframes which can be used to frame an entry.
