What is the typical approach to trading with FVG?

• A. Enter immediately at the appearance of any FVG.
• B. Identify liquidity voids and provide potential retracement entry opportunities; use lower time frames for entries.
• C. Use FVG to predict exact reversal without retracement.
• D. Ignore retracements and hold until trend reversal.

Answer: (B)

FVGs are liquidity voids where order flow left an imbalance, and the market often revisits these zones to fill the gap before continuing. The typical approach is to identify these liquidity voids and look for retracements into the FVG area, rather than jumping in as soon as the gap appears. Then, aim to enter on the retracement using lower time frames for timing, looking for additional confirmation such as a structure pullback, a reaction in volume, or a candlestick pattern that suggests a pause or reversal. This helps improve the odds and the risk-reward by aligning entries with a tested zone where price might revert, instead of assuming an immediate move or a perfect reversal without retracement. Remember, while FVGs indicate potential liquidity-fill zones, they do not guarantee reversals, so always combine with other signals and manage risk.