Video: Most Traders Pick the WRONG FVGs… Do This Instead
Creator: The Soup Room
Original Video: Watch the original video
Difficulty: Advanced
The Big Idea
The Soup Room selects a one-minute fair value gap through a larger context: four-hour direction, hourly references, a fifteen-minute gap, and the midnight, 8:30, and 9:30 opening prices. The entry is a lower-timeframe reaction within a larger area, not simply the presence of any three-candle gap.
The source demonstrates a successful bearish example and reports live calls. It does not provide a complete sample establishing the claimed probabilities. Several entry and stop variants are discretionary, so the lesson is best treated as a framework to specify and test.
Separate Higher-Timeframe Direction From Local Structure
The four-hour example is bearish after a close beneath a swing low while a bearish gap remains relevant. The hourly chart has broken a swing high and still holds a bullish gap, creating a genuine conflict rather than universal alignment.
The creator stays open to the bearish thesis because price also reacts at bearish hourly zones overlapping the four-hour area. This is not proof that the higher timeframe always wins. Record which opposing observation would change the thesis and what would authorize an entry despite the conflict.
Consecutive gaps combined into one zone require a predefined rule: outer boundaries, midpoint, and permitted overlap. The source describes combining gaps visually; changing the zone after a losing retest would invalidate a controlled comparison.
Use Session Opens as References, Not Causes
The source marks midnight, 8:30, and 9:30 opens and interprets displacement beneath them as bearish evidence. Specify the timezone and exact bar used before applying that idea. The transcript does not fully formalize those conventions, so do not assume a platform’s daily boundary automatically equals the intended midnight.
A close under an opening price describes location. It does not establish institutional distribution, prove manipulation, or obligate price to reach untapped lows. Repeated tests may make the level worth observing, but stop locations and participant identities cannot be inferred directly from OHLC bars.
The Nested-Gap Sequence
- Identify the larger context and fifteen-minute zone before execution.
- Observe a one-minute close beneath the relevant fifteen-minute gap boundary in the bearish case.
- Identify a bearish one-minute gap formed during the displacement and overlapping the larger zone.
- Wait for the selected retest or reaction while the intended opening-level relationship holds.
- Validate stop placement and room to the low already known at that time.
A bullish fair value gap has candle three’s low above candle one’s high. A bearish one has candle three’s high below candle one’s low. Each becomes confirmed only after candle three closes.
A one-minute close through a previously confirmed fifteen-minute zone is not the same as a completed fifteen-minute inversion. The source explicitly permits the earlier, lower-timeframe decision. Label it that way rather than treating the unfinished fifteen-minute candle as if its final close were known.
Choose One Entry Model
The creator discusses a tap, a reaction after the tap, and a later displacement-based entry. These carry different prices, confirmation, and missed-fill rates. If a completed reaction is required, do not claim entry at an earlier intrabar touch that occurred before the confirming information existed.
The midnight level briefly gets reclaimed in the example. The source therefore waits for renewed evidence that it is acting as resistance. Define “reconfirmation” numerically before testing; a convincing retrospective annotation is not an execution rule.
Stop Width and Target Room Must Be Measured Together
The source considers the one-minute gap high, a combined zone containing two one-minute gaps, or the fifteen-minute high. A wider boundary may tolerate more excursion but requires smaller quantity for the same monetary risk. “Safest” is not a guaranteed outcome.
In an original example, a short at 100 with a 100.20 stop and target 99.40 offers 3R before costs. Moving the stop to 100.40 halves that nominal ratio to 1.5R. With a $100 price-risk budget, quantities fall from 500 to 250 shares. A wider stop cannot be judged only by whether it would have saved one winner.
Use the current low of day as observed before entry, not the final session low. If fresh equal highs form above price before a later entry, reassess its specific risk and reward; the first entry’s thesis does not automatically justify every subsequent short.
Build a Reproducible Review
Capture the four-hour and hourly context, the confirmed fifteen-minute boundaries, the one-minute gap formation time, opening prices and timezone, entry rule, stop variant, and pre-entry target. Include failed zones, early reactions without a fill, and trades canceled after a level is reclaimed.
Compare nested versus non-nested gaps under the same directional policy; compare tap versus completed-reaction entry; and compare stop variants under equal planned cash risk. Keep other rules unchanged and evaluate later unseen data.
The excerpt does not provide exact gap-selection and merging algorithms, timezone conventions, or mechanical confirmation thresholds. An automated reconstruction would need those research choices stated openly instead of claiming to reproduce the creator’s strategy.
Final Takeaway
The proposed filter is contextual nesting, not a magic gap shape. Keep higher-timeframe zones confirmed, distinguish one-minute evidence from fifteen-minute confirmation, and define entry, invalidation, and target before the retest outcome appears.
Risk Disclosure
This article is educational, not financial advice or a recommendation to trade or purchase a service. Trading can cause substantial losses, particularly with leverage. Stops and limit orders do not guarantee fills or prices. Hypothetical examples and historical results depend on data, timing, costs, spreads, slippage, liquidity, gaps, and market conditions and do not guarantee future performance. Validate the assumptions and risk controls before considering live use.
CandleChasers independently interprets this source and is not affiliated with or endorsed by The Soup Room. Performance claims belong to the creator; the examples and review framework are CandleChasers’ own educational work.