FVG Trading Strategy: Step-by-Step Guide & Transcript

[00:02] days like this, this, and this. And I'm about to show you exactly how. I've been trading for 9 years, and in that time, I've tested hundreds of complicated strategies. And this is one of the only FVG strategies that actually works. And

[00:16] strategy, and then we'll do a one-mon back test to prove to you that it works. Let's hop right into the strategy. The goal of this strategy is to make consistent profits in less than 90

[00:29] minutes per day. And to do this, we're going to get to our desks right at 9:30 a.m. EST. This strategy works for any market, whether it's futures, stocks, crypto, or forex, and you use the same time for each market. There are two ways

[00:42] that you can use this strategy depending on whether you're scalping or day between the two is what separates profitable traders from the unprofitable traders. If you weren't aware already, scalping means catching quick and small

[00:56] moves and taking a lot more trades. And then day trading is catching bigger moves and taking less trades. First, we're going to go over how to scalp using this strategy. For step one, we're going to identify our key levels. Now,

[01:09] this part is stupid simple, but if you mess it up, everything else will be wrong. So, make sure to pay close attention. We're going to start on our five-minute chart. Now, to get to this chart, you're going to go over here on

[01:21] Trading View and click the five minute button. This means that each candle you see represents five minutes of trading time. Next, we're going to wait for the first candle of the day at that 9:30 time to print. And then, we're going to

[01:34] mark out the high and the low of the first 5-minute candle. To do this, we're side of the screen on Trading View and select the trend line tool. and then we're going to mark out the high and the low of that first 5-minute candle that

[01:49] happens at 9:30 to 9:35 a.m. Eastern Standard Time. But in order to find good trades, we need to know which way the market is going to move, which brings us to step two, confirming the market's direction. For step two, we are going to

[02:02] switch to the 1 minute chart by clicking this one minute button on Trading View. candle represents 1 minute worth of trading time. Next, we're going to wait for a break of the level, but we need a fair value gap. Simply crossing through

[02:17] the level, whether it's a wick or a candle closure, just won't cut it. As you can see, the market rather quickly forms a fair value gap. Now, if you didn't know already, a fair value gap is just a three candle formation where we

[02:30] leave a gap between one candle's wick can see here, the middle candle was very expansive, showing a lot of force, which tells us that buyers are in control, especially when it happens through this

[02:45] first 5-minute candle level. So, since we broke through the high, the direction is bullish. We're going to be looking for long trades. But knowing the market direction is useless if you don't know when to enter and exit trades, which

[02:58] brings us to step number three, finding our entry, our stop loss, and our target. So, first we want to wait for a retest of the fair value gap. Meaning we need the market to trade back into the fair value gap. Now, after we've traded

[03:11] into the fair value gap, then we wait for this retest candle right here to get engulfed. Now, if you're not aware of what an engulfing is, it's when the body of one candle gets completely closed through by opposing direction candles.

[03:26] As you can see, this first candle that traded into the fair value gap has now gotten engulfed. And this shows us that buyers are in control. And as soon as we get this engulfing, you're good to enter the trade. Now, in order to do this,

[03:39] on Trading View, and you're going to find this icon right here. And then you click long position since we are taking a buy. This helps you plot out your entry and find good risk-to-reward. So for our stop loss or our invalidation

[03:55] point where we will cut our losses if we're wrong, you want to put that under the lowest area that we traded into that fair value gap. And you always want to give it one tick of breathing room. And then for our takerit, we are just

[04:08] targeting a fixed 3:1 return, meaning that on our winning trades, we make three times as much profit as we would lose on a losing trade. So, as you can see here, we've got $400 at risk to make

[04:22] $1,200 in profit. And after you execute the trade, you sit back and let the market do the heavy lifting for you. No need to micromanage your trade. There's no guessing and no confusion with this strategy. As you can see here, this

[04:35] trade took 24 minutes to play out and netted a profit of $1,200. Not bad for 24 minutes worth of work, if you ask me. And there you have it. It's that stupid simple. And yes, the scalping entry alone is powerful, but

[04:50] knowing when to use the scalping versus the day trading entry is what separates the profitable traders from the unprofitable. Let's learn how to use the day trading entry first, and then you'll learn how to choose which one you will

[05:03] use. And this brings us to step one of the day trading entry. Now, we're still going to identify key levels, but we're going to do it just a little differently because for this entry, you're going to start on the 15minute chart. Now, to do

[05:17] this, you go over on the top at Trading View and you select the 15-minute button. Now, this means that each candle represents 15 minutes of trading time. We're going to wait until the 9:30 to 9:45 Eastern Standard Time candle

[05:31] closes. So, it's still the first candle of the day. It's just using the 15minute instead. And then just like we did with the scalping strategy, we're going to mark the high and the low of the first 15-minute candle. And this brings us to

[05:45] step two of the day trading entry, which again, we're going to confirm direction, but we're going to do this differently than we did in the scalping strategy. going to the one minute chart, we're going to go to the five-minute chart.

[05:59] five-minute button. And then we're going to wait for a very specific pattern. What we need is similar to the previous strategy, but a little bit different. As

[06:12] you'll see here, we have now created our fair value gap through this first candle. But here is where things get different because instead of waiting for a retest, we're actually going to set a limit order on the FVG. This means once

[06:28] the market trades back into the fair value gap, we're automatically entered into the market. Now, if you don't know how to do this, you just click the buy button here on Trading View, and then you want to make sure to click for a

[06:40] limit order. Now, on Trading View, you can actually drag down your order to put it right on that level. Now, for my stop loss, I'm going to put it right at the first candle in the fair value gap pattern. Remember a fair value gap is

[06:53] three candles. So it goes right under this first one. And then for our target instead of a 3 to one return we are going to target a fixed 2:1 return. Now I know what you might be thinking. Why

[07:07] wait till you see the back test and you'll see exactly why I chose this target. Now, as you can see, the market traded into the fair value gap, which entered us into the trade, and we have a nice move away from our entry. For this

[07:22] trade, we risked $945 to make $1,900. And the one thing that the last is that you don't need to micromanage your trades, and you can

[07:34] just sit back and let the market do the heavy lifting for you. Now, I want to be clear that every once in a while, you're going to have the market come down and revisit the fair value gap. That's totally fine. Don't freak out and close

[07:47] your trades. Just trust in the system. Now, this trade took 35 minutes to play Now, this trade took 35 minutes to play out. And remember, it made $1,900. Not bad for 35 minutes if you ask me. Now, I know you're probably thinking,

[08:00] "Well, Casper, when do I trade the scalping entry versus the day trading entry?" And my answer for you is the only way to know for sure is to look at the data. So, let's go over to the back test and put this strategy to the test.

[08:13] need you to take a look at this disclaimer. Now that we've got that out of the way, let's take a look at how the back test turned out for both strategy entries. Let's take a look at our 5minute first candle scalping entry

[08:28] 5minute first candle scalping entry first. It netted $10,950 in our back test with a win rate of 70%. And now taking a look at our 15minute first candle day trading entry, it netted $15,400

[08:43] with a win rate of 81% over 16 trades. So to answer the big question, how do you pick which strategy to use? Well, here is how you're going to decide. If you have blown accounts before or if you struggle with emotional

[08:59] trading, then use the day trading approach. It's more forgiving and it has a higher win rate. And yes, as you've seen in the back test, the scalping works, too. But it requires split-second decision-making that most struggling

[09:12] traders aren't ready to make. So, congratulations. You now have a powerful and proven strategy. But chances are that you've had great strategies before and yet you're still not profitable. Now, the reason that I know this is

[09:25] because I used to be in the exact same boat, which is why I mentor traders to help them avoid all the losses and all the wasted time that I had to go through. I do this by trading live with my traders. I share my screen and my

[09:39] executions. Every single trade that you take will be reviewed. Plus, you get direct access to me for anything that you need. And you get access to our trader dashboard and all of the other stuff we have in our software. Now, I'm

[09:51] so confident in this system that if you don't get funded in 12 weeks, then I will personally sit with you and trade until you get funded. This is not your average trading discord. And due to this being a direct and intensive mentorship,

[10:04] I limit availability to the public. So, if the link at the top of the description still works, then there are slots remaining in this enrollment. But the wait list for the next enrollment.

[10:16] Make sure to subscribe to the channel and I'll see you in the next video.