1. Welcome to the Next Level of Precision Trading
📌 Smart Money doesn’t chase price—they wait for price to come to them.
You’ve learned how institutions manipulate liquidity and engineer fake breakouts. Now, it’s time to refine your entries using the most powerful tools in ICT trading:
✔️ Order Blocks (OBs) – The foundation of institutional price action.
✔️ Fair Value Gaps (FVGs) – The missing link between liquidity sweeps and precision entries.
As Dave – No Nonsense Trader, I know that perfecting these concepts will take your ICT trading to the next level. This chapter will show you how to combine OBs & FVGs for sniper-like precision in trade execution.
📌 Image Guide:
📷 Suggested Image: A side-by-side chart showing a traditional breakout entry vs. a refined Order Block + FVG entry.
🎨 AI Prompt:
“Create a side-by-side financial trading chart comparing a traditional breakout entry vs. a refined ICT trade using Order Blocks and Fair Value Gaps (FVGs). Highlight precision entry points for Smart Money traders.”
2. Understanding the Role of Order Blocks in Smart Money Trading
📌 An Order Block is the last candle before a major move, representing institutional positioning.
Types of Order Blocks:
✔️ Bullish Order Block (OB) – The last down candle before a strong bullish move.
✔️ Bearish Order Block (OB) – The last up candle before a strong bearish move.
Why Order Blocks Matter:
✔️ They act as price magnets—price often returns to these areas before continuing.
✔️ They show where Smart Money has unfilled orders (mitigation).
✔️ They provide high-probability entry points when combined with liquidity sweeps.
🔍 Example:
Instead of chasing a breakout, a Smart Money trader waits for price to return to a Bullish OB, then enters long.
This is why Dave – No Nonsense Trader always teaches traders to let price come to them, not the other way around.
📌 Image Guide:
📷 Suggested Image: A trading chart highlighting a Bullish Order Block, showing price retracing into it before continuing the uptrend.
🎨 AI Prompt:
“Create a trading chart illustrating a Bullish Order Block, showing how price retraces into the order block before resuming the uptrend. Include clear annotations for entry points and Smart Money logic.”
3. The Power of Fair Value Gaps (FVGs) in Trade Entries
📌 A Fair Value Gap (FVG) is an imbalance in price action where liquidity is missing.
How to Identify a Fair Value Gap:
✔️ Look for a three-candle formation where the middle candle’s body has no overlap with the previous and next candle.
✔️ These gaps act as liquidity magnets—price often returns to fill them before continuing.
Why FVGs Work for Entry Confirmation:
✔️ They show where Smart Money had unfilled orders.
✔️ They align with liquidity sweeps, confirming trade setups.
✔️ They provide a refined entry zone instead of entering at random.
🔍 Example:
A trader waits for price to sweep liquidity and return to an FVG before taking a trade, ensuring an entry that aligns with Smart Money positioning.
📌 Image Guide:
📷 Suggested Image: A chart showing a Fair Value Gap (FVG) forming after a strong move, with price retracing into it before continuing in the original direction.
🎨 AI Prompt:
“Create a trading chart illustrating a Fair Value Gap (FVG) forming after a liquidity sweep, showing price retracing into the imbalance before continuing in the original direction. Use professional trading annotations.”
4. Combining Order Blocks & FVGs for High-Probability Entries
📌 The highest-probability trades happen when an Order Block and Fair Value Gap align.
The Ideal Trade Setup:
✔️ Liquidity sweep occurs—stops get taken.
✔️ Price retraces into an Order Block (OB).
✔️ An FVG exists inside the OB, providing extra confluence.
✔️ Entry is placed inside the FVG within the OB, at a refined level.
🔍 Example:
A trader spots a Bullish Order Block after a liquidity grab, but instead of entering immediately, they wait for price to retrace into an FVG inside the OB. This allows a sniper entry with minimal risk.
This is how Dave – No Nonsense Trader ensures his trades are executed with Smart Money precision.
📌 Image Guide:
📷 Suggested Image: A trading chart illustrating an Order Block and Fair Value Gap confluence trade, showing price sweeping liquidity before entering the OB + FVG zone.
🎨 AI Prompt:
“Create a financial trading chart showing a high-probability trade setup combining an Order Block (OB) and Fair Value Gap (FVG) for entry. Show price sweeping liquidity before retracing into the confluence zone. Use professional annotations.”
5. The Role of Time & Price in OB + FVG Entries
📌 Timing matters—ICT trades are not just about levels, but WHEN price reacts.
Key ICT Time-Based Entry Techniques:
✔️ Trade during Kill Zones (London Open, NY Open, NY Close).
✔️ Enter on retracements inside OBs & FVGs—never chase price.
✔️ Use higher timeframe confluence for directional bias.
🔍 Example:
A trader sees price returning to a Bullish Order Block during London Open, aligning it with institutional trading hours for added confirmation.
📌 Image Guide:
📷 Suggested Image: A trading clock infographic showing ICT Kill Zones with optimal OB + FVG trade timing.
🎨 AI Prompt:
“Create a professional trading clock infographic illustrating ICT Kill Zones, highlighting optimal trade entry times for Order Blocks and Fair Value Gaps. Use a structured financial trading theme.”
6. How to Backtest & Refine OB + FVG Trade Execution
📌 The best traders refine their setups through backtesting.
How to Backtest OB & FVG Trades:
✔️ Look at past liquidity sweeps & OB reactions.
✔️ Analyze how price filled FVGs before continuing.
✔️ Test different risk-to-reward ratios based on OB strength.
🔍 Example:
A trader backtests 20 past trades using OB + FVG confluence and finds that waiting for price to mitigate 50% of the OB increases win rate significantly.
This is why Dave – No Nonsense Trader constantly refines his strategy—data beats emotions.
📌 Image Guide:
📷 Suggested Image: A backtesting log with OB + FVG trade entries, showing win/loss analysis and performance improvement notes.
🎨 AI Prompt:
“Create a structured backtesting log template for ICT traders, specifically tracking Order Block (OB) and Fair Value Gap (FVG) trade setups. Use a professional, clean format with win/loss analysis.”
7. What’s Next?
🔥 In the next chapter, we’ll take it even further. You’ll learn:
✅ How the Smart Money Algorithm moves price toward liquidity.
✅ How to predict price movements using institutional price delivery models.
✅ How to refine trade execution based on deeper order flow principles.
📌 Key Takeaways from This Chapter:
✅ Order Blocks & Fair Value Gaps provide Smart Money entry zones.
✅ The best trades occur when OBs & FVGs align.
✅ Time-based execution increases trade accuracy.
✅ Backtesting is essential to refining OB + FVG setups.
📌 Next Up: Chapter Four – Smart Money Algorithm: How Price Seeks Liquidity 🚀
🔥 You’re now refining your trade execution—keep going!
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