Video Transcript:
Hello everyone. This is David from Trader Dale, giving you the trade of the week. This week, we are going to focus on an active swing trade that we just entered in Bitcoin about a week, week and a half ago or so. And the one thing I really like about this setup is that it just fills and hits all the boxes as far as what we like to do strategy-wise. Okay? And that is basically to use fair value gaps and pivot highs or lows. Okay? And use those to understand and judge order flow to determine where price is going, but more importantly, where price can deliver from to get to those areas that we believe price is going. Okay, so if you look at the left-hand side, we have a monthly chart of Bitcoin, and when we are swing trading, it always starts on the higher time frame. We need to get a bias. Okay, after we get a bias, then we are going to look for a narrative and an execution. Okay. But on the monthly chart, usually the monthly and weekly are used in swing trading for bias. Okay. Now, if you are day trading, we are using more, you know, the 4-hour, daily, 4-hour in that range. Sometimes the 1-hour. And then, you know, obviously the execution charts are going to be your short-term charts, 1-minute, 2-minute, 3-minute, maybe 5-minute. In this case, our execution charts are going to be either daily charts or maybe a 4-hour chart. In this case, it is a monthly narrative to a daily. Okay. So if you look on the left-hand side, all right, just the overall picture of Bitcoin. These red boxes here are price disrespecting bullish fair value gaps. Okay. Now, we have already disrespected a bullish fair value gap up here and down here. Okay. When we closed below here in February. So the bias is clearly bearish. Okay. Now, on the way, we created two monthly fair value gaps. And as you can see, the first time that we created this fair value gap, the market tapped into it and then rejected away and continued away. Okay, this is a confirmation of bearish order flow. So now, when price came into this level and consolidated right around this high-volume area from 2024, okay, we created another monthly fair value gap. So if price is going to continue lower, okay, where is it going to continue lower from? It is usually going to be a longer-term fair value gap. In this case, we have a perfect monthly fair value gap. So we are going to wait for price to tap into that monthly fair value gap and see if we can find a rejection here or a change in order flow on the shorter-term charts to give us confirmation that price is going to reject here. Because if price is going to reject here, okay, now we have a clear target to the external low right here and then the next external low, which is right down here. So now we have a bias. Okay. Now we go to the daily chart and we look for our narrative, or in this case, it is going to be our narrative and our execution. Okay. So this purple box up here is this monthly fair value gap. So on the daily chart, this area right here, this kind of consolidation, was this wick on a daily chart. Now, what do we look for once we come into that monthly fair value gap? Okay, we are looking for a change in order flow because, as you can see, as price is going into that fair value gap, this move right here, the daily order flow is bullish. We are respecting bullish fair value gaps here, bullish fair value gaps here, bullish fair value gaps here, and bullish fair value gaps here. So we have bullish order flow. In order for us to enter a short position, we need the short-term order flow to be bearish, which is going to match the long-term order flow. And that happens right here when we inverse the first daily fair value gap, the bullish fair value gap, to the downside. This is a disrespect. This now shows that the short-term order flow has flipped bearish and is now in line with the higher time frame order flow. Once price breaks below this inverse, okay, we are going to get short either on the market or on a pullback into that inverse fair value gap. Either one. Okay. And we are going to have two targets. Our first target is going to be this low because when price comes from an internal level like a fair value gap and rejects, it is now going to seek liquidity in the opposite direction, which is going to be external lows. So this would be the first target right here. And our second target is going to be this low made right here. Okay, back in 2024, which is just under 50,000. Okay, this exemplifies exactly what we do, not only in swing trading but also in day trading. Now, in day trading, you have other factors that come into play, like session liquidity, equal highs and lows, data, things like news, and, you know, it is a little different. But in swing trading, things are a little bit more simplified, and we can knock this down really to internal to external, which is taking moves from internal higher time frame fair value gaps using a change in order flow on a shorter-term time frame to gauge and enter a trade where we can manage risk and target external levels because that is what markets do. Okay, they break external levels, they rebalance the internal, and they go external. Okay, same thing here. This candle here inversed this fair value gap. We created a monthly. Okay, we rallied back internal and then went external to break this level right here. And now we are looking to do the same thing. We have an external liquidity point right here. We tapped into the monthly. We rejected it. Now we are looking to break that low because that is the normal order of things and targets in order flow. If you understand that price will go to, and when you know where price is going to go to and you know where price can deliver from, that gives you a very good narrative and framework for a trade, and this is exactly how it is playing out right now. Okay. Price has obviously not hit its targets. Okay. We do have a little trend line liquidity down here. You can draw a couple of them here. You can draw these two right here. These four touch points. One, two, three, four. That is being taken out. Okay, pretty strong. That is extra confluence in drawing liquidity. So overall, all in all, this is a very, very good setup. An A++ setup in our book. And this is something that we teach and do every day at Trader Dale, not only on a swing trading basis but also on an intraday basis, trading the equity indices and also the currencies in the Asia and London markets. Okay, so I hope you enjoy this. Hey everyone, it is Dale here. I hope you enjoyed the video. If you like to trade alongside me and our team of prop firm funded traders every day, then click the link below the video and hop aboard. We look forward to trading with you.
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