Pullback Level Based On SMC

Pullback level Based on SMC, the price will most likely to pullback to FVG to close the gap.
In
an impulsive wave (initiation), there could be a number of Fair Value Gaps. One trader once said
that the FVG at the deepest pullback carry more weight (not sure if it is correct).
I also come across an article that says, the validity of a FVG is further enhanced when we look
left of the chart, a minor resistance level runs through that FVG. What is your approach in
finding where the price would react to it as it pulls back when you have a series of FVG along
the possible retracement levels
ChatGPT
Memory updated
In determining where the price might react during a pullback when there are multiple Fair Value
Gaps (FVGs) along the possible retracement levels, I would approach it with the following
considerations:
1. Prioritizing Deeper FVGs:
 Deepest Pullback Theory: If an FVG is located at the deepest part of a pullback, it is

likely to carry more significance. This is because deeper pullbacks tend to represent
stronger corrections within the overall trend, often reaching significant levels where
institutional players are likely to enter or re-enter positions.
2. Overlapping Confluences:
 Confluence with Resistance Levels: An FVG that aligns with a minor resistance level
from previous price action can be seen as a stronger area for potential price reaction. This
is because multiple traders may be watching the same levels, increasing the likelihood of
significant buy or sell orders being placed there.
3. Market Structure and Key Levels:
 Key Levels and Market Structure: Identify major swing points and structural levels.
An FVG that aligns with these key levels can add to its significance. For example, if an
FVG aligns with a previous swing high or low, it may act as a more potent area of
interest.
4. HTF and LTF Alignment:
 Higher Timeframe Confirmation: Validate FVGs on higher timeframes (HTFs) like the
daily or 4-hour chart. An FVG visible on both higher and lower timeframes (LTFs) might
have a stronger influence.
5. Volume Analysis:
 Volume Analysis: Look at volume spikes within the FVG. Higher volume within an
FVG can indicate stronger institutional activity, making it more likely that the gap will
act as a significant pullback level.
Practical Approach:
1. Identify All FVGs: Start by marking all the visible FVGs on your chart.
2. Check Confluence: Look for FVGs that overlap with key resistance/support levels and
previous structural points.
3. Deep Pullback Significance: Prioritize FVGs located at deeper pullback levels.
4. Confirm on HTF: Ensure these FVGs are visible on higher timeframes to validate their
significance.
5. Volume Check: Analyze volume spikes within these FVGs for added confirmation.
Example:
 Suppose you have identified three FVGs during an impulsive wave.

o FVG1 at a minor resistance level
o FVG2 at a deeper pullback level with no obvious resistance
o FVG3 at a deeper pullback level, aligned with a previous swing high and showing
a volume spike
In this scenario, FVG3 would be the most significant due to the deep pullback, alignment with a
previous swing high, and volume confirmation. FVG1 would also be notable due to the minor
resistance confluence, but it might carry less weight compared to FVG3.
Conclusion:
By combining the deepest pullback theory, overlapping confluences, market structure, higher
timeframe validation, and volume analysis, you can enhance your ability to predict where the
price might react during a pullback. This multifaceted approach provides a more comprehensive
understanding of potential reaction levels, aligning with Smart Money Concepts and institutional
behavior.
4o
ChatGPT can make mistakes.
4o
Higher Timeframe Confirmation: Validate FVGs on higher timeframes (HTFs) like the daily or
4-hour chart. An FVG visible on both higher and lower timeframes (LTFs) might have a stronger
influence. Something interesting, as I have never come accross articles that suggest using multi
timeframe for this purpose.
ChatGPT
Memory updated
Using multi-timeframe analysis to validate Fair Value Gaps (FVGs) can provide a more
comprehensive understanding of market dynamics and improve the accuracy of your trading
strategy. Here's how multi-timeframe analysis can be applied to FVGs:
Multi-Timeframe Analysis for FVG Validation
1. Identify FVGs on Higher Timeframes (HTFs)
 Start by identifying FVGs on the higher timeframes, such as the daily or 4-hour charts.
These FVGs represent more significant gaps that might reflect the activity of institutional
traders.
 Mark these FVGs on your chart.
2. Drill Down to Lower Timeframes (LTFs)
 Move down to the lower timeframes, such as the 1-hour or 15-minute charts, and check if
the FVGs identified on the higher timeframes are also visible.
 An FVG that is visible on both higher and lower timeframes indicates that it is a
significant level, as it has been respected across multiple timeframes.
3. Confluence and Alignment
 Look for confluence where FVGs on higher timeframes align with key levels on lower
timeframes. For example, if an FVG on the daily chart aligns with a support or resistance
level on the 1-hour chart, it enhances the probability of a price reaction.
 Also, check if these FVGs coincide with other technical indicators or patterns on lower
timeframes, such as trendlines, moving averages, or Fibonacci levels.
4. Volume Analysis
 Analyze volume within these FVGs on both higher and lower timeframes. Higher volume
within these gaps can further validate their significance.
 Look for volume spikes or significant volume changes that correspond to the FVG areas
on multiple timeframes.
5. Price Action Confirmation
 Observe how price reacts to these FVGs on lower timeframes. Look for confirmation
patterns such as candlestick patterns (e.g., pin bars, engulfing candles) or other price
action signals that indicate a potential reversal or continuation at these levels.
 If the price shows strong reactions to FVGs on lower timeframes that were identified on
higher timeframes, it confirms the significance of these gaps.
Practical Steps:
1. Mark Higher Timeframe FVGs: Identify and mark FVGs on the daily or 4-hour charts.
2. Analyze Lower Timeframes: Move to the 1-hour or 15-minute charts and look for the
same FVGs.
3. Check Confluence: Look for alignment with other technical levels or indicators.
4. Volume Analysis: Check for volume spikes within these FVGs on multiple timeframes.
5. Monitor Price Action: Observe how price reacts to these FVGs on the lower timeframes.
Example:
 Suppose you identify an FVG on the daily chart around the 1.2000 level.
 When you switch to the 1-hour chart, you see the same FVG around the 1.2000 level, and
it aligns with a minor resistance level.
 Volume analysis shows a spike within this FVG area on both the daily and 1-hour charts.
 On the 15-minute chart, you notice a bullish engulfing pattern forming within the FVG,
indicating a potential reversal.
In this case, the FVG around 1.2000 is significant due to its presence across multiple timeframes,
alignment with a resistance level, volume confirmation, and price action signal.
Conclusion:
Using multi-timeframe analysis for validating FVGs adds an extra layer of confirmation to your
trading strategy. It allows you to identify more significant levels where price is likely to react,
increasing the accuracy of your trades and aligning with the behavior of institutional traders.
4o
ChatGPT can make mistakes.

Pullback Level Based On SMC

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Pullback level Based on SMC, the price will most likely to pullback to FVG to close the gap.

1. Prioritizing Deeper FVGs:

 Deepest Pullback Theory: If an FVG is located at the deepest part of a pullback, it is

3. Market Structure and Key Levels:

4. HTF and LTF Alignment:

 Suppose you have identified three FVGs during an impulsive wave.

Multi-Timeframe Analysis for FVG Validation

1. Identify FVGs on Higher Timeframes (HTFs)

2. Drill Down to Lower Timeframes (LTFs)

3. Confluence and Alignment

5. Price Action Confirmation

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