🚀 Master the Market: Understanding Fair Value Gaps (FVG) 📈
Ever looked at a chart and noticed a massive, sudden candle that leaves a "hole" behind? That’s not just volatility—it’s a Fair Value Gap (FVG), and it’s one of the most powerful tools in a trader’s arsenal.
🤔 What is a Fair Value Gap?
An FVG occurs when the market moves so quickly in one direction that an imbalance is created between buyers and sellers. On a 3-candle sequence, it’s the empty space between the wick of the 1st candle and the wick of the 3rd candle.
Essentially, the price moved too fast for "fair" trading to occur, leaving behind an unfilled pocket of liquidity.
🔍 Why Should You Care?
Markets are like nature—they hate a vacuum. Price has a high probability of returning to these "gaps" to "rebalance" the market before continuing its original trend.
* Bullish FVG: A big green candle leaves a gap. Expect price to dip back into this zone to find support.
* Bearish FVG: A big red candle leaves a gap. Expect price to rally back into this zone to find resistance.
💡 How to Trade It:
1. Identify the Gap: Look for impulsive moves on the H1, H4, or Daily timeframes.
2. Wait for the Retest: Don't chase the pump! Wait for price to gravitate back into that "empty" zone.
3. Entry & Exit: Use the FVG as your entry zone. Your stop-loss usually goes just outside the gap’s boundary.
⚠️ Pro Tip:
Not every gap gets filled immediately. Always combine FVGs with other indicators like RSI or Volume to confirm your bias.
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