Fair Value Gaps are price zones formed when the market moves with such velocity that certain levels remain untraded and inefficiently priced.
🔴 These imbalances often act as magnets for price, becoming key areas for potential retracement.
🔴 While it’s widely observed that most gaps eventually “fill”, the timing remains highly uncertain and non-linear.
🔴 Therefore, FVGs should be approached as dynamic support and resistance zones, rather than guaranteed targets.
🔖 How to identify them?
🔴 A Fair Value Gap emerges when three consecutive candles create a structural imbalance.
🔴 In a bullish context, the low of the middle candle exceeds the high of the first, leaving a void where no trading activity occurred. The inverse applies in bearish conditions.