Fair Value Gaps (FVG)

A fair value gap forms when a strong candle moves so fast that the wicks of the candles before and after it do not overlap. The space between them was traded in one direction only.

Trading ZonesIntermediate9 min read24 Oct 2026

Sample content, pending review by Bangrazka

Learning objectives

Draw an FVG correctly from three candles
Judge which gaps matter
Combine a gap with structure and liquidity

Drawing the gap

In a bullish FVG, the gap runs from the high of the first candle to the low of the third. If those two do not overlap, the middle candle left an imbalance. A bearish FVG is the mirror: from the low of the first candle to the high of the third.

Which gaps matter

Gaps are everywhere on lower timeframes. The ones worth attention formed during the move that broke structure, or right after a liquidity grab. A gap on its own is a location, not a reason to trade.

Chart example

Illustrative diagram, not real market data.

Practical example

After a grab of sell-side liquidity, price breaks structure upward with a large candle that leaves a bullish FVG. When price pulls back into the gap, a trader looks for a reaction there, with the stop below the low of the move.

Video lesson

The video for this lesson will be added here.

Common mistakes

Trading every gap regardless of context
Drawing from candle bodies instead of wicks
Ignoring a gap that has already been fully filled

Key takeaways

An FVG is a three-candle imbalance
Context decides whether it matters
It marks a location to watch, not an entry by itself