Fair Value Gaps (FVGs) are one of the most powerful yet overlooked tools in smart money trading.
They reveal imbalances in price action — areas where the market moved too fast, leaving “unfinished business” behind. And guess what? Smart money often comes back to fill them.
Let’s dive in 👇
🧠 What is a Fair Value Gap?
A Fair Value Gap is a price imbalance between three consecutive candles. It occurs when the middle candle moves so fast that its wick doesn’t overlap with the one before or after it.
In simple terms:
> The market moves too quickly → leaves a gap → price often retraces to fill it.
🔍 How to Spot a Fair Value Gap
Look for:
1. Three candles in a row (e.g. bearish-bearish-bearish or bullish-bullish-bullish)
2. The wick of candle 1 and candle 3 DO NOT touch or overlap
3. The space between them = your Fair Value Gap zone
That’s the imbalance.
🧱 Why FVGs Matter in Trading
✅ Liquidity Zones — Price often returns to FVGs to “fill the gap”
✅ Perfect Pullback Entries — Great spots to enter in trending markets
✅ Smart Money Tool — Institutions create and exploit these imbalances
✅ Works on All Timeframes — Especially powerful on 15min, 1H, 4H
💡 Bullish vs Bearish FVG
🟢 Bullish FVG: Price broke up rapidly → look to enter on pullback into gap
🔴 Bearish FVG: Price dropped sharply → look to short on bounce into gap
📊 How to Use FVGs in Real Trades
Step 1: Identify the Fair Value Gap zone
Step 2: Wait for price to return into the gap
Step 3: Watch for a rejection (wick rejections, break of structure)
Step 4: Enter trade with tight stop-loss outside the gap zone
Step 5: Target the next liquidity pool or order block
⚠️ Pro Tip:
Fair Value Gaps work best when:
They align with the trend
They're near an order block or major structure level
You combine them with Change of Character (ChoCH) or Break of Structure (BoS)
🧠 Final Thought
Fair Value Gaps expose where price is likely to revisit — and if you’re watching closely, they give sniper entries with clear risk-to-reward.
📌 Learn to spot them. Align them with market structure. Tra
de them with confidence.
#MarketPullback #ScalpingStrategy #SaylorBTCPurchase #USNationalDebt