Ali Khan

Fair Value Gaps and Imbalances in Trading: The Smart Money Strategy Retail Traders Overlook

Ever wonder why price suddenly reverses or “fills the gap” before continuing its move?


That’s not randomness — it’s a blueprint. The market leaves behind imbalances and fair value gaps (FVGs) that signal where price is likely to return. These aren’t just visual quirks — they’re footprints of institutional activity.

If you’re serious about mastering smart money trading strategies, this is one concept you can’t afford to ignore.

What Is an Imbalance in Trading?


In trading, an imbalance refers to a price movement that’s too fast — where buyers or sellers aggressively push price in one direction, leaving little or no opportunity for the opposite side to fill orders.

The result? A “gap” in the price action, often seen between:

The high of one candle

And the low of the next two or three

This creates what’s called a Fair Value Gap — a zone where price moved inefficiently, and is likely to return for rebalancing.

Smart money knows this. They use FVGs as magnets for future price movement.



What Is a Fair Value Gap (FVG)?


A Fair Value Gap is a void in price action caused by an imbalance in order flow. It signals that the market moved too quickly, and a “fair value” hasn’t been established yet.

This happens often during:

Breakouts from consolidation

News-driven spikes

Strong impulsive moves by institutions

These gaps are high-probability zones for price to return to, as smart money often revisits them to fill unfilled orders before continuing the move.



Why Smart Money Leaves Imbalances on Purpose


Institutions don’t just want to move price — they want to move it efficiently and profitably.

When they execute large positions, they:

1. Push price aggressively in their desired direction (creating the imbalance)

2. Wait for price to pull back into the gap where unfilled orders still rest

3. Use that pullback to accumulate or distribute more positions

This is what’s known as a mitigation move — and it’s a core part of smart money concepts and institutional trading strategy.



How to Identify and Use FVGs in Your Trading


Here’s a simple method to spot Fair Value Gaps:

✅ Look for three consecutive candles where the middle candle’s body moves sharply away from the prior and following candles, leaving a visible gap.

✅ Mark the zone from the first candle’s high to the third candle’s low (for bullish gaps) — or vice versa for bearish ones.

✅ Wait for price to retrace into that gap, then confirm with:

Market structure alignment

Session timing (e.g., NY or London open)

Rejection wicks or reversal patterns

Bonus: Fair Value Gaps align beautifully with other smart money tools like:

Liquidity zones

Order blocks

Break of structure (BOS)



Real-Life Example: The FVG Trap-and-Reverse


Let’s say price breaks out of a range with a strong bullish candle. It leaves a gap between the prior candle’s high and the breakout candle’s low.

Retail traders buy the breakout. But smart money? They wait.

Price retraces back into the Fair Value Gap, fills the unbalanced orders, and then launches higher with institutional backing — leaving retail behind or stopped out.

If you were patient, you’d catch the move from the zone smart money used to re-enter.



Why Fair Value Gaps Give You an Edge


Most traders chase price. You don’t have to.

FVGs give you:

✅ Precise re-entry zones
✅ Low-risk, high-reward setups
✅ Context on where smart money is active

If you can master reading imbalances, you’ll stop trading based on emotion — and start trading based on logic and intention.



Final Thoughts: Read the Gaps, Trade the Intention


Fair Value Gaps aren’t just technical quirks — they’re clues.
They show where price moved unfairly and where smart money plans to return. When you align FVGs with liquidity zones, market structure, and timing, you unlock a high-probability roadmap for price movement.

Start marking these gaps. Wait for the return. Let the market come to you.

4 months ago | [YT] | 395

Ali Khan

Liquidity Zones in Trading: How Smart Money Uses Them to Predict Price Movement


If you're only looking at support and resistance, you're missing the real game.
Liquidity zones are where price is engineered to go — not because of trendlines or indicators, but because that’s where smart money finds orders. In this blog, we uncover how institutions manipulate price to grab liquidity and how you can trade with them, not against them.

Whether you’re trading forex, crypto, or indices, this is the edge retail traders never learn.



What Are Liquidity Zones in Trading?


Liquidity zones are areas on the chart where a large number of stop-loss orders, pending orders, or breakout entries are likely placed. These zones often form:

Just above swing highs

Just below swing lows

Around equal highs/lows or consolidation ranges

To smart money, these aren’t just chart levels — they’re targets. Why? Because that’s where they can fill large institutional positions without slippage.

In simple terms: Liquidity zones are the market’s honey pots.



Why Price Moves to Liquidity — Not Because of Patterns


Most retail traders are taught to believe price reacts to patterns: double tops, head-and-shoulders, etc.

But here’s the truth:
Price is drawn to where liquidity is resting — not to confirm your chart pattern.

Smart money drives price into these zones to:

Trigger stop-losses and force exits

Activate breakout traders’ buy/sell stops

Fill their own positions at premium or discount prices

This causes what looks like a “fake breakout” or “market manipulation” — but it’s really just the business model of trading.



The Psychology Behind Liquidity Grabs


When price approaches a key level, what happens?

Retail traders enter based on fear of missing out (FOMO)

Others place tight stop-losses expecting a reversal

Newbies pile into breakout trades

Smart money knows this. So, they manufacture liquidity grabs to:

Induce retail entries in the wrong direction

Run stops to grab liquidity

Reverse the market with precision once their orders are filled

This is how price action manipulation works in real time — and why understanding liquidity is the cornerstone of smart money concepts.



How to Spot Liquidity Zones Like a Pro


If you want to level up your price action trading, here’s how to identify high-probability liquidity areas:

✅ Mark Equal Highs and Lows
– These are magnets for stop hunts.

✅ Look for Consolidation Before Expansion
– Breakouts often return to “grab” liquidity from the range.

✅ Use Time and Sessions
– London and New York opens are prime time for liquidity raids.

✅ Study Candle Wicks and Impulsive Moves
– Long wicks into key zones usually signal a liquidity sweep.

✅ Confirm with Market Structure Breaks
– After a liquidity grab, watch for structure shifts before entering.



Why Liquidity Zones Give You an Edge


Retail traders react. Smart traders anticipate.

When you learn to spot where price wants to go (liquidity zones), you stop chasing trades and start waiting for traps to spring — so you can trade with confirmation and confidence.

This turns your trading psychology from fearful and reactive to strategic and calm.



Real-World Example: The Stop Hunt Trap


Let’s say EUR/USD has equal highs on the 1-hour chart.

Retail traders:

See a resistance zone and short early

Place stops just above the highs

Smart money:

Pushes price slightly above the highs

Grabs those stops

Then dumps the price, creating a false breakout

If you waited for the liquidity grab and structure shift, you’d be entering with the institutions, not against them.



Final Thoughts: Liquidity Zones Are the Market's Intentions Made Visible


Liquidity is the market’s goal.
Candles, patterns, and indicators are just by-products of price moving from one liquidity zone to the next.

If you want to survive and thrive in forex, crypto, or stock trading, train yourself to see the trap before it’s sprung. Don’t follow the herd — study their behaviour, spot the zones, and wait for price to reach where the real business is being done.

4 months ago | [YT] | 239

Ali Khan

The Hidden Truth About Price Action and Timeframes in Trading


Most traders obsess over candlestick patterns and timeframes — but what if everything you’re seeing is an illusion?
That’s the shocking truth smart money understands and retail traders miss. In this lesson, we’ll expose the deception behind candles, the manipulation within price action, and how to read the story behind the chart — not just the surface.

If you're serious about mastering price action trading, this insight will reshape your entire approach.



Why Candles Can’t Be Trusted in Isolation


At first glance, candles seem like solid signals. A bullish engulfing bar? Buy. A pin bar at support? Go long. But here’s the reality:

Candlestick patterns don’t move price — liquidity does.

The candle you see is just a representation of what happened during a specific timeframe. That timeframe is completely arbitrary, chosen by the broker or charting platform. Whether you're looking at a 15-minute chart or a 4-hour candle, what you're seeing is filtered and sliced — not objective truth.

In other words: Price isn’t reacting to candles. It’s reacting to liquidity, order flow, and smart money positioning.



The Timeframe Trap: Why Market Structure Is More Reliable


One of the biggest mistakes new traders make is jumping between timeframes looking for clarity — but all they end up doing is confusing themselves.

Why? Because timeframes are man-made illusions.

A candle that looks bullish on the 4H might be a liquidity grab on the 15M.

A pin bar that screams “reversal” might just be a stop hunt before continuation.

If you're not anchoring your bias in market structure, you're reacting to painted pictures — not real price intent.

✅ Pro Tip: Always start with higher timeframes for structure, then drop down to lower ones for execution — but never rely on a single candle for decisions.



How Smart Money Manipulates Candlestick Psychology


Candles are emotional traps. Retail traders are taught to see them as signals — but smart money uses that belief against them.

Here’s how:

They push price into a known liquidity zone, creating a candle pattern that entices traders.

Retail traders jump in based on the candle — thinking it confirms a move.

Then the market reverses after collecting liquidity, leaving those traders trapped.

This is intentional market manipulation — and it’s one of the core principles behind smart money concepts.



What to Focus on Instead of Candlestick Patterns


To gain a real edge in the markets, shift your focus from candles to context:

Liquidity Pools – Look for prior highs/lows where stop-losses are likely stacked.

Market Structure – Identify higher highs/lows or breaks of structure across timeframes.

Imbalances & Fair Value Gaps – These often indicate where price will return to rebalance.

Time of Day & Session Volatility – Price behaves differently during London open vs. New York close.

If you learn to combine these elements, you'll see why a candle formed — not just how it looks.



The Psychology of Time in Trading


Remember this: Time is a filter, not a signal.

Candles are just visual summaries of what price did during a timeframe — not why price moved. Once you understand that time compresses or expands perception, you’ll stop chasing signals and start anticipating intentions.

This mindset shift is critical to mastering trading psychology, especially when trading volatile pairs or reacting to news-driven moves.



Final Thoughts: See Through the Illusion, Trade with Precision


Every candle you see is someone else’s trap.
Retail traders buy and sell based on what candles appear to show. Smart traders look deeper — at liquidity, timing, and the structure of the move. That’s how they stay ahead of manipulation and align with institutional logic.

If you’re serious about evolving your strategy, start treating candlesticks as tools, not truths. Don’t react to them — read them in context.

4 months ago | [YT] | 256

Ali Khan

Liquidity in Trading


If you don’t understand liquidity, you don’t understand the market.
This single concept — often overlooked by beginners — is what professional traders, institutions, and market makers use to their advantage every day. It drives price, fuels volatility, and determines where smart money enters and exits.


Whether you’re trading forex, crypto, or stocks, understanding liquidity in trading is a must if you want to stop getting manipulated and start trading with real precision.



What Is Liquidity in Trading?


In trading, liquidity is the ability to buy or sell an asset quickly without causing a big change in its price. But on a deeper level, it represents where the orders are — and more importantly, where the big players are hunting for them.

Institutions don’t randomly jump into the market. Their trades are large, and they need volume to execute without major slippage. This means they look for areas where retail traders have clustered their entries, stop-losses, or pending orders. Those areas are liquidity zones, and they become targets — not signals.



How Smart Money Uses Liquidity to Manipulate Price


Let’s say you’re watching a strong bullish move. Retail traders buy the breakout — but what’s really happening?

Smart money is often selling into that bullish pressure. Why? Because that’s where the buyers are. The market always moves toward liquidity, and retail traders are liquidity.

This manipulation is part of what’s known as smart money concepts — a way of viewing price action through the lens of institutional intent. The goal? Trap retail traders, collect their orders, and then reverse price in the desired direction.



The Truth About Stop Hunts and “Fakeouts”


Think getting stopped out right before a big move is bad luck? It’s not. It’s engineered.

Stop hunts are strategic.
Retail traders tend to place stops in obvious places — just above recent highs or below recent lows. Market makers know this. They push price into these zones to “clear the books,” grab liquidity, and then move price the other way. That’s why understanding liquidity is also critical to understanding market structure.

These aren’t random spikes — they’re calculated moves to rebalance the market.



How to Trade Liquidity Like a Pro


Want to align with institutional trading strategy instead of getting trapped by it? Here’s how:

Mark liquidity pools: Look for equal highs/lows, swing points, fair value gaps, and zones where traders likely have stops or pending orders.

Don’t chase price: Let the market reach into a liquidity zone, then observe for a market structure shift or confirmation candle.

Time your trades with volume and sessions: Volume spikes around the London and New York opens often coincide with liquidity grabs.

Think like smart money: Ask yourself, “Where are the orders?” before asking, “Is this a breakout?”



Why Liquidity Is the Foundation of Market Behaviour


Liquidity is more than a trading metric — it’s the invisible hand guiding price action. Every breakout, false move, or reversal is linked to the hunt for liquidity.

Once you start viewing the markets through this lens, you’ll stop feeling confused and start anticipating moves before they happen. You’ll know why price moves, where it’s likely headed, and how to position yourself with smart money — not against it.



Final Thoughts: Learn to Think Like the Markets Move


Mastering liquidity in trading changes everything. It’s the difference between falling victim to manipulation and leveraging it as part of your edge.

Stay sharp, stay patient — and always trade with intention.

4 months ago | [YT] | 144

Ali Khan

Profitable traders are just unprofitable traders who didn't give up.

7 months ago | [YT] | 373

Ali Khan

Price doesn’t respect your Order Blocks because…

You chose the wrong ones.

The problem is you’re taking the definition way too literally because you are not trading

Order Blocks anymore, you are trading patterns instead.

How?

…By believing every down-close candle before a move-up is a +OB.

And…

…By believing every up-close candle before a move down is a -OB.

This does not work.

But enough said because here’s how you pick the right Order Blocks in just a few simple steps…

First, start with identifying a support level.

An example would be if we’re in an up-trend, a +FVG in Discount would make for a good support level.

Second…

We want to see price trade to it and move away – breaking the high of the last down-close candle.

Now listen carefully…

Because this is the important part that makes or breaks this +Order Block – we want to see a +FVG form with the +Order Block.

Why?

Because this validates the down-close candle as a high-probability +Order Block…

That you would feel safe picking for a long entry.

Plus as a bonus…

Seeing a Low form above the +Order Block is great news because it induces breakout traders – into shorting.

Now it’s a waiting game, we place our long entry…

Price returns to the Order block – takes out the sell-side liquidity below the low – rebalances the Fair Value Gap – and then moves away.

Putting profits in our pockets.


- A.K

1 year ago | [YT] | 338

Ali Khan

Finding High Probability FVGs with Narrative behind them

Do you REALLY think Buying & Selling any random Fair Value Gaps here will work?

Of course NOT.

Yet, you make this mistake every time.

Because the problem is you’ve been misled into trading “patterns.”

And this does NOT work…

…Because you lack a narrative behind the Fair value gap.

Why?

Because a narrative tells us “WHEN” a Fair Value Gap should work, and more importantly “WHEN” it should fail.

But, enough said…

Here’s how you find a high probability FVG “with narrative.”

First, start with identifying whether we’re in a continuation or a reversal…

To make it simple, let’s go with a reversal.

Now we need to qualify it by analysing what just happened, for example, let’s just say we

took sell-side liquidity below a low and tapped a bullish Order Block to the left…

These 2 variables qualify our reversal.

Here’s a Tip: A high probability Fair Value Gap will form AFTER this raid on sell stops.

And this…

Indicates strength.

Now we have a narrative behind our Fair Value Gap...

So when we BUY, it is likely to be respected and offer us support.


– A.K

1 year ago | [YT] | 275

Ali Khan

Using Premium & Discount to your advantage

You get STOPPED because you BUY – when price is in a Premium and you SELL – when price is in a Discount…

…And this?

Does NOT work…

Here’s why:

See, just as you wouldn’t buy something that’s too expensive…

And sell something that’s too cheap.

This basic principle of commerce is found in the charts as well – more specifically in the concept of…

Premium and Discount.

Where a premium, is considered a price level that’s too expensive – and a discount, is considered a price level that’s too cheap.

Yet despite this simplicity, following this basic principle has become a dire problem…

Why?

As I’ve said in the past…

The #1 threat to traders in 2024 is becoming an inferior carbon copy of one another – to the point where you can NOT tell them apart…

Copying each other’s biases…

…Following the same strategies, patterns, and models, just to constantly second-guess themselves...

But what’s worse…

A decline in basic understanding.

How?

Think about it, if most traders are just carbon copies of one another and we know for a fact that 90% are doomed to not make it.

Then a decline in understanding the real meaning behind these concepts is likely true.

And this shows…

Especially because to this day traders make the same mistake of buying in a premium and selling in a discount.

But enough’s enough, I know that with the right knowledge that’s properly demonstrated…

Mistakes can be rectified.

Which is why I made an Instagram reel explaining how to use premium & discount to your advantage.

Go to my Instagram and look for "The Secret Reason Behind Your Losses Revealed".


– A.K

1 year ago | [YT] | 210

Ali Khan

What makes "08:30" a significant time of day?

I would not be wrong in presuming that most of you reading this have watched ICT’s 2022 Mentorship.

After all…

It is ICT’s most popular beginner-friendly teaching to date.

Why?

Because it primarily focused on teaching JUST one model and one time window to trade that model.

One Model = ICT’s 2022 Model

One Time window = The AM Session

However, “08:30” was specifically made the centre of the AM session.

And for good reason…

Fundamentally, "08:30" is a significant time of day due to the coordinated liquidity injections by major financial institutions.

Which means that, at this time, funds are injected into the market that provides essential liquidity that fuels transactions and stabilises prices, similar to how oxygen energises and sustains life.

The electronic highway that allows banks to do this…

Is the FED Wire.

Which works by processing large-value payments between banks and allows for immediate transfer of funds.

In simple terms…

When a bank needs to send money...

It uses Fedwire to transfer the funds instantly to the recipient's bank.

This system helps ensure the smooth and efficient functioning of the financial market.

Moreover…

We also see an overlap with Economic activity that occurs at this time in the form of High Impact news events.

Both of these factors directly translate into making 08:30 a significant time of day.


– A.K

1 year ago | [YT] | 303

Ali Khan

Navigating an “algorithm change”

For context…

The previous post was about a glitch at the NYSE that caused some stocks, like "Berkshire Hathaway, Barrick Gold, and NuScale Power" to appear as if they had lost up to 99% of their value.

This “glitch” stemmed from a software update made by the Consolidated Tape Association (CTA).

People are…

And have been worried for a while now.

…So, the news of this “glitch” caused by a software update made by the CTA doesn’t help.

But, I ended the previous post with a quote…

“We, as humans, are incredibly adaptable and we'll adapt to this change if it comes.”

Why?

Because changes have come in the past and we’ve always adapted to them, like a river flowing around obstacles.

Take the transition from typewriters to computers as an example...

In the latter half of the 20th century...

Mass production of computers transformed communication and work processes.

And this...

Forced us to adapt.

From typewriting letters to sending e-mails.

Or, take World War II as an example which spanned 1939 to 1945…

Where nations and individuals had to swiftly adapt to the challenges of wartime conditions.

My point is this…

The world’s commerce is dependent on the algorithms that govern today’s financial markets.

So, while the doubts about a 'changing algorithm' (which have been a cause of great anxiety), are reasonable.

It is important to understand that...

Changes made so far have only made it more efficient.


– A.K

1 year ago | [YT] | 153