Candle Fair Value (Horizontal Division)
Understanding Internal Structure of a Candle
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What is Candle Fair Value?
A candle is not just a price movement. It contains internal balance zones. These zones are called fair value areas.
Fair value represents the balanced price inside a candle where the market often returns.
Candle Division Method
To understand fair value, divide the candle into two equal parts.
- Upper Half → Premium Zone
- Lower Half → Discount Zone
Draw a horizontal line at the center of the candle (50%).
This line is called the Neckline.
Understanding Premium and Discount
The upper half of the candle is considered a premium area. The lower half is considered a discount area.
- Premium Zone → Better for selling
- Discount Zone → Better for buying
This is called Horizontal Fair Value because the division is flat across the candle.
Left Side Candle Importance
The left candle is used as a reference candle. It shows the strength and direction of the market.
- Strong bearish candle → Look for sell in upper half
- Strong bullish candle → Look for buy in lower half
Left candle gives the story.
Right candle gives the entry.
Simple Trade Logic
- Identify a strong candle (left side)
- Mark its midpoint (neckline)
- Wait for price to return
- Enter at fair value zone
Do not enter in the middle of movement.
Wait for price to return to fair value.
Common Mistakes
- Not marking the midpoint correctly
- Entering without waiting for return
- Ignoring candle strength
Next Page: Dynamic Fair Value Using Gann Angles
Complete Smart Trading Course
Structured Learning Path
- Introduction to Smart Trading Strategy
- Candle Fair Value (Horizontal Division)
- Dynamic Fair Value (Gann Angle Concept)
- Sniper Entry Model (ICT + Gann + Fair Value)
- Risk Management and Trade Planning
- Execution Plan and Final Strategy Summary
Follow each section step by step for complete understanding
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