Fair Value Gap, SMT Divergence Strategy

A robust ICT trading strategy identifies high timeframe Fair Value Gaps (15-min+) on NQ/ES futures for entries confirmed by SMT Divergence. Suitable for swing o

Published · Updated · Methodology: ICT

Part of: Fair Value Gap (FVG)

  • Methodology: ICT
  • Content type: strategy
  • Timeframes: 15-minute or higher (for identifying high timeframe Fair Value Gaps), Lower timeframes (for entry confirmation), 1-minute, 5-minute, Daily
  • Markets: NQ (Nasdaq 100 Futures), ES (S&P 500 Futures)

Indicators used

  • Fair Value Gap (FVG)
  • SMT Divergence

Source video

Decoded from: 3 Boring Indicators That Make Me $2,398/Day Trading by Colin Jones — watch the original

Key timestamps:

  • 0:30 - The First Indicator (Fair Value Gap)
  • 3:00 - Fair Value Gap definition
  • 4:00 - High timeframe FVG rule
  • 5:37 - The Second Indicator (SMT Divergence)

Strategy overview

A fair value gap marks the imbalance left on the chart when price moves too quickly for buyers and sellers to transact at every level in between. What separates this entry from the usual FVG material is that the gap is never asked to stand on its own: Colin Jones pairs it with SMT divergence, a concept borrowed from ICT's work in which two correlated instruments — here the Nasdaq (NQ) and the S&P (ES) futures — are watched for moments when one makes a new high or low and the other refuses to follow.

That pairing changes what the FVG is being used for. Instead of treating the gap as a signal in itself, the video treats it as a location — a place on a higher-timeframe chart (15-minute and above) where price is expected to react — and then looks to the second instrument for agreement or disagreement before anything happens on the lower timeframes. It is a top-down structure: daily and 15-minute charts to establish where the imbalance sits, 1- and 5-minute charts for the closer read, and the NQ/ES relationship acting as an independent check that a single chart cannot provide.

A note on the framing: the source video is titled "3 Boring Indicators That Make Me $2,398/Day Trading", and the dollar figure is the creator's own headline claim — not a verified result, and not something reproduced or measured here. No mechanical rules were extracted from this video, so what this page documents is the conceptual pairing and the way the two tools are meant to inform each other, with the FVG itself described visually as a three-candle pattern rather than through any fixed numeric setting.

Topics

fair value gap strategy · smt divergence · ict trading · tradingview strategy · pine script · swing trading · day trading strategy · nq futures · es futures · 15 minute strategy · price action · trading strategy · ict fair value gap · futures trading strategy

Frequently asked questions

What is SMT divergence?

SMT (Smart Money Technique) divergence is an ICT concept that compares two correlated instruments — commonly the Nasdaq (NQ) and S&P (ES) futures. When one makes a new high or low and the other fails to confirm it, that disagreement is read as a sign that the move lacks broad participation.

Why combine a fair value gap with SMT divergence?

An FVG identifies where an imbalance sits on the chart, but on its own it says nothing about whether the broader market agrees with a move. SMT divergence adds a second, independent instrument to the read, so the gap becomes a location to watch rather than a signal to act on by itself.

Why does this approach use a higher timeframe for the fair value gap?

The video works top-down: gaps are identified on 15-minute and higher charts, where imbalances are fewer and more significant, while lower timeframes such as the 1- and 5-minute are used for the closer read. Higher-timeframe context is what keeps the number of candidate gaps manageable.

Does the income figure in the video title mean the strategy works?

No. The figure is the creator's own claim in the video title and has not been verified or reproduced. Any approach built from these concepts should be tested on historical data and forward-tested before capital is committed.

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.

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