Fair Value Gap Thinkorswim Strategy and Platform

Thinkorswim is a powerful trading platform that allows you to trade stocks, options, and other securities with ease.

The platform's Fair Value Gap strategy is designed to help you identify and capitalize on potential trading opportunities.

One key feature of Thinkorswim is its advanced charting capabilities, which can be used to visualize the Fair Value Gap in action.

Thinkorswim's platform is available to both individual and institutional traders, making it a versatile tool for traders of all levels.

The Fair Value Gap strategy can be used to trade a variety of securities, including stocks, ETFs, and options.

Thinkorswim's platform offers a range of tools and resources to help you get started with the Fair Value Gap strategy, including educational materials and real-time market data.

The Fair Value Gap is a key concept in trading that can help you identify potential areas of support or resistance. It's essentially a gap in the price chart where the price has moved away from its fair value.

To spot these gaps, you can use the Fair Value Gap Strategy, which involves identifying gaps as they happen and looking for the price to eventually come back to that level. The image above shows a daily chart of the SPY Index with gaps outlined in gray boxes, where the arrows indicate where the price eventually returned to that level.

The Fair Value Gap Width Filter is a tool that helps you define the filtering multiplier, which is a key input option that you can customize to suit your needs. You can also customize the color of Bullish, Imbalance, and Mitigation areas to make them stand out on your chart.

Here are the key features of the Fair Value Gap:

Fair value gap refers to the difference between the price a company is willing to sell its assets and the price a buyer is willing to pay for them. This gap can be significant.

A key factor contributing to the fair value gap is the lack of transparency in the valuation process. The article notes that companies often use complex financial models and assumptions, making it difficult for buyers to accurately assess the value of the assets.

The fair value gap can have serious consequences, including delayed or failed transactions, and even bankruptcy. It's essential for companies and investors to understand the root causes of this gap to mitigate its effects.

The International Valuation Standards Council (IVSC) has developed guidelines to help improve transparency and consistency in valuation, but more work is needed to address the fair value gap.

The Fair Value Gap Strategy is all about spotting gaps in the market as they happen. These gaps are shown in the gray boxes on a daily chart of the SPY Index.

To use this strategy effectively, you need to watch how the price reacts to the gap and also pay attention to the volume. Proper risk management is crucial when placing trades.

You can spot these gaps by looking at charts like the one above, where the arrows show where the price eventually comes back to the gap level. This level can be a key area of support or resistance.

As you try to trade the restest, remember not to enter trades blindly.

To use the Fair Value Gap strategy on Thinkorswim, you'll want to start by spotting these gaps as they happen. This involves looking at the chart and identifying the gaps outlined in gray boxes.

To customize your Fair Value Gap settings, you can use the Fair Value Gap Width Filter, which defines the filtering multiplier. You can also choose from various color customization options for Bullish, Imbalance, and Mitigation indicators.

To display the percentage of mitigation areas, toggle on the Display Percentage of Mitigation option. This can be a helpful feature in visualizing the impact of these gaps on your trades.

Using the Fair Value Gap Strategy requires spotting gaps as they happen, which can be done by analyzing charts and looking for areas of support or resistance. You can see examples of this in the image of the SPY Index chart, where gray boxes outline the gaps and arrows show where the price eventually comes back to this level.

The key area of support or resistance is often found at the level where the price eventually comes back to after a gap. This is where you can try to trade the retest.

Proper risk management is crucial when placing trades, and it's essential to watch how the price reacts and the volume as well.

The Thinkorswim platform is a powerful tool for traders and investors. It's designed to help users make informed decisions with its robust features and advanced trading tools.

Thinkorswim offers a wide range of trading platforms, including desktop, web, and mobile versions. The desktop version is a popular choice among advanced traders.

One of the key features of Thinkorswim is its paperMoney account, which allows users to practice trading with virtual money. This feature is a great way to test strategies and get a feel for the platform without risking real money.

Thinkorswim also offers a range of educational resources, including tutorials and webinars. These resources are designed to help users learn how to use the platform and improve their trading skills.

The Thinkorswim platform is known for its advanced charting capabilities, including real-time data and customizable charts. This feature is a must-have for traders who rely on technical analysis to make their trading decisions.

Thinkorswim offers a range of account types, including individual and joint accounts. Users can also set up multiple accounts within the platform to manage their trading activities.