Fair Value Gaps (FVG): Spotting Price Imbalance
A fair value gap (FVG) happens when price moves so fast in one direction that it skips over a range of prices, leaving a visible gap between three consecutive candles.
Types of Fair Value Gaps:
- Bullish Fair Value Gaps
- Bearish Fair Value Gaps
Here’s how to spot one:
- Look at three candles in a row
- If the high of the first candle and the low of the third candle don’t overlap — that gap is an FVG
- Price has a tendency to return to “fill” that gap before continuing
FVGs act as magnets for price. They’re one of the most reliable short-term targets in ICT analysis.