Fair Value Gap, Liquidity Strategy

Learn a Smart Money Concepts trading strategy combining Fair Value Gaps and Liquidity for identifying high-probability trade setups across various markets.

Published · Updated · Methodology: SMC

Part of: Fair Value Gap (FVG)

  • Methodology: SMC
  • Content type: strategy

Indicators used

  • Fair Value Gap (FVG)
  • Liquidity

Source video

Decoded from: Fair Value Gap + Liquidity = Profit | Best Fair Value Gap Trading Plan in 2025! by Smart Risk — watch the original

Strategy overview

A fair value gap is the price imbalance left behind when a move happens too quickly for both sides to transact, marking a zone price often returns to. This entry decodes a video that refuses to read that gap in isolation: it pairs the FVG with liquidity, so the two ideas answer different questions — liquidity points to where price is being pulled, and the gap marks where to step in along the way.

The source video, "Fair Value Gap + Liquidity = Profit | Best Fair Value Gap Trading Plan in 2025!" from the Smart Risk channel, frames this pairing as a complete trading plan rather than a lone signal. The reasoning behind the combination is what sets it apart: an imbalance by itself says nothing about direction, so it is read against liquidity — the pools of resting orders that sit above obvious highs and below obvious lows and that price tends to be drawn toward. Direction comes from the liquidity objective; the entry comes from the gap that forms on the way to it.

That order of operations — context first, entry second — is the thread worth following here. Rather than a catalog of patterns, the video treats FVG and liquidity as two halves of the same decision, a useful lens for anyone who has learned to spot gaps but not which ones to act on. This page introduces that concept and the specific angle the Smart Risk video takes on it.

Topics

fair value gap strategy · liquidity trading strategy · smc strategy · ict trading · price action · trading strategy · pine script · tradingview strategy · smart money concepts · technical analysis · fvg liquidity strategy

Frequently asked questions

Why pair a fair value gap with liquidity instead of using the gap alone?

A fair value gap on its own only marks an imbalance — it does not indicate direction. Pairing it with liquidity adds that missing context: liquidity points to where price is likely being drawn (the resting orders it tends to run toward), and the gap then serves as a reference entry in that direction. The Smart Risk video builds its plan around using the two together.

What does 'liquidity' mean in this trading plan?

In this context, liquidity refers to the pools of resting orders — typically stop orders — that accumulate above prominent highs and below prominent lows. Price is often drawn toward these areas, which is why the video uses them to define where the market may be heading before looking for a fair value gap to enter.

Is this FVG and liquidity approach tied to a specific market or timeframe?

Fair value gaps and liquidity are concepts that apply across markets and timeframes rather than to a single instrument. The source video presents the combination as a general trading plan, so the ideas can be examined on whichever chart and timeframe you trade.

How can I test an FVG plus liquidity approach before using it?

Backtest it on historical data and study how gaps behave relative to nearby liquidity before committing capital. Strategy Decoder extracts the structure of strategies like this one from video sources so you can review and evaluate the concept on TradingView.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

Strategy Decoder catalogs 2,229 decoded strategies. Each one is extracted with confidence scoring, cross-linked to the indicators it uses, and kept up to date as new videos are processed daily. Load this page with JavaScript enabled to use the interactive tools, or start from the strategy explorer to filter by methodology, market and timeframe.

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