Fair Value Gap (FVG) – Complete Guide
📌 What is FVG?Fair Value Gap (FVG) is a market imbalance that occurs when price moves sharply, leaving a “gap” that hasn’t been properly traded.
Simple explanation:When the market doesn’t fill all orders properly, a gap forms — this is called an FVG.
🧠 FVG Structure – 3 Candle PatternFVG usually appears in 3 candles:
First candle → normal moveSecond candle → impulsive moveThird candle → continuationThe gap is between:
Bullish FVG: High of first candle & Low of third candleBearish FVG: Low of first candle & High of third candle 📈 Types of FVG🟢 Bullish FVGPrice moves sharply upGap formsPrice often returns → buy opportunityLogic: Smart money moved quickly; price returns to fill orders.
🔴 Bearish FVGPrice moves sharply downGap formsPrice often returns → sell opportunity ⚡ Why FVG is ImportantShows market imbalanceHighlights high-probability entry zonesIndicates smart money activityExplains liquidity fill conceptRule of thumb:“Price always tries to fill imbalances.”
🎯 FVG Trading Strategy – Step by StepIdentify the trendLook for a strong impulsive moveMark the FVG zoneWait for price to returnTake entry with confirmation 🚀 Pro TipsCombine FVG with Order Blocks for stronger setupsHigher timeframe FVGs are more reliableBest during London & New York sessionsAvoid low-volume FVGs (false signals)
FVG is quite simple if we don’t overcomplicate it. It’s just showing where price moved too fast and left imbalance. But the mistake is treating every gap as a trade. Context matters a lot, trend, higher timeframe levels, and how price reacts when it comes back. Without that, it’s just a zone on the chart, not a setup.
Something that always confuses me in FVG is how people decide which gaps are actually valid and which ones are just noise. On lower timeframes there are so many overlapping FVGs that it gets messy fast. I also struggle with knowing when price is likely to respect it vs just blowing straight through it without reaction. Market context matters most.
robinhudson posted:FVG is quite simple if we don’t overcomplicate it. It’s just showing where price moved too fast and left imbalance. But the mistake is treating every gap as a trade. Context matters a lot, trend, higher timeframe levels, and how price reacts when it comes back. Without that, it’s just a zone on the chart, not a setup.
Exactly. FVG is just inefficiency, not a signal by itself.The real edge comes from context — trend, liquidity, and higher timeframe alignment.Without that, it’s just a zone, not a setup.
robinhudson posted:FVG is quite simple if we don’t overcomplicate it. It’s just showing where price moved too fast and left imbalance. But the mistake is treating every gap as a trade. Context matters a lot, trend, higher timeframe levels, and how price reacts when it comes back. Without that, it’s just a zone on the chart, not a setup.
FVG alone doesn’t matter — context decides everything. In lower timeframes most gaps are noise; only those aligned with higher timeframe trend and liquidity tend to hold.
harryclough posted:Something that always confuses me in FVG is how people decide which gaps are actually valid and which ones are just noise. On lower timeframes there are so many overlapping FVGs that it gets messy fast. I also struggle with knowing when price is likely to respect it vs just blowing straight through it without reaction. Market context matters most.
FVG alone isn’t enough — context is what filters noise from valid setups. Lower timeframe gaps without higher timeframe alignment are usually just noise; respect comes from trend + liquidity.
wardpeter posted:Wish we focused more on context around FVG instead of just spotting the pattern. Sometimes they work clean, other times price just ignores them. Trend, liquidity, and timing seem to matter more than the gap itself in my experience.
Exactly — FVG is just a tool, but context is what gives it meaning. Trend, liquidity, and timing decide whether it reacts or gets ignored.
If we look at the opposite of FVG, it’s basically areas where price traded efficiently with balanced order flow. Those zones don’t have the same pull for price to return. That’s why not every move needs to be filled. FVG works best in context, but assuming price must always come back can lead to missed moves or bad entries.
harryclough posted:Something that always confuses me in FVG is how people decide which gaps are actually valid and which ones are just noise. On lower timeframes there are so many overlapping FVGs that it gets messy fast. I also struggle with knowing when price is likely to respect it vs just blowing straight through it without reaction. Market context matters most.
FVGs that form after the price has passed through a liquidity gap are more valid.Depending on the direction you want to trade, FVGs that form in the discount (for bullish trading) and premium (for bearish trading) areas are more powerful.Divergences that occur within the FVG in two symbols are a sign that the FVG is likely to be more valid.Look to the left of the chart and see what structure is present alongside the FVG you are looking at.
