Trade Like A Girl 💸

In our last post, we talked about how big institutional players hunt for liquidity. When those massive entities finally get their orders filled, they don’t buy 10 shares at a time like we do. They buy millions.

This causes the price to rocket up or slam down so fast that the market machine can’t keep up. It creates an Imbalance (often called a Fair Value Gap or FVG).

Imagine a line of three candlesticks during a massive upward spike:

Candle 1: The starting point.

Candle 2: A giant, explosive green candle in the middle.

Candle 3: The next candle that keeps going.

If you look closely at a normal chart, the thin wicks of Candle 1 and Candle 3 usually overlap or touch. But during an imbalance, Candle 2 is so big that the top wick of Candle 1 and the bottom wick of Candle 3 never touch. It leaves an open gap of pure, unnegotiated price territory inside that middle candle.

The Magnet Effect:

The market algorithm hates inefficiency, it loves balance. Think of an imbalance like a vacuum or a dent in a pillow. Over time, the price has a strong tendency to drift back down into that gap to fill it and balance out the orders before continuing its true direction.

When you know how to spot these gaps, you stop chasing the big, scary green candles out of fear of missing out (FOMO). Instead, you calmly wait for the price to return to the gap, using it as a highly accurate entry zone.

The Homework: Spot the Gap

Step 1: Find a Rocket Ship

Open up TradingView and look at a chart that recently had a massive, explosive move (a giant red or green candle).

Step 2: Check the Neighbors

Look at the candle before the explosion and the candle after it.

Step 3: Measure the Gap

Look at the space between the wick of the first candle and the wick of the third candle. Do they touch? If there is a clear empty space in the middle, you just found a Fair Value Gap.

Step 4: Post Your Trailing Zone

In the comments, tell us: “On [$Ticker], I see a major imbalance on the [Time Frame] chart between $[Price] and $[Price]. I’m waiting for the price to fill this gap.”