Gaps

Question 1

What is SIBI?

Answer 1

Sell side imbalance, buy side inefficiency. Sell side was offered, buy side wasn’t, so it is inefficient. AKA bearish fair value gap.

Question 2

What is BISI?

Answer 2

Buy side imbalance, sell side inefficiency. Buy side was offered, sell side wasn’t, so it is inefficient. AKA bullish fair value gap.

Question 3

How is a SIBI fair value gap validated and invalidated?

Answer 3

Validated by price of the return candle closing below the consequent encroachment. Invalidated by price of the return candle closing above the consequent encroachment.

Question 4

How is a BISI fair value gap validated and invalidated?

Answer 4

Validated by price of the return candle closing above the consequent encroachment. Invalidated by price closing below the consequent encroachment.

Question 5

What is FVG inversion and how can it be applied in trading?

Answer 5

A principle used as a way to identify a potential position entry point when the FVG is invalidated. When the FVG is invalidated, we wait for price to return to the FVG and or consequent encroachment to see if price will then reject off giving confirmation of a position entry point.