Definition of Fair Value Gap (FVG) in Technical Analysis
In the world of technical analysis, a phenomenon known as Fair Value Gap (FVG)occurs when price moves rapidly in a particular direction, leaving a gap between candles on the chart. This gap forms when there isn’t enough trading in that area due to the fast price movement, creating an "incomplete" zone between the candles.
What is FVG?
A Fair Value Gap (FVG)is a gap that appears between candles as a result of a strong price movement, where the area between the previous and next candles remains incomplete in terms of trades. These gaps usually occur in markets with strong momentum, either bullish or bearish. It is believed that the price may return to fill this gap over time.
Why does FVG happen?
FVG happens when price leaves gaps due to a rapid price movement, meaning there is a lack of executed trades in that area. Once the balance between supply and demand is restored, the price may return to cover the gap.
How can one use FVG?
FVG is seen as an opportunity for the price to return and fill the gap, whether in an upward or downward direction. These gaps can serve as a point of entry to identify the next price movement.
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I will be posting daily about this strategy until everyone understands it, and I will return later to provide examples after completing the topic. Then, with God's will, we will start giving entry signals for the trades.
