Fair Value Gap (FVG) Explained
A fair value gap is a three-candle imbalance where price moved so fast it left an untraded gap between wicks — an area the market often revisits to 'fill'.
What is a fair value gap?
An FVG (also called an imbalance) forms on a three-candle sequence when the first candle's wick and the third candle's wick do not overlap, leaving a gap spanned only by the large middle candle. It marks a zone where buying or selling was so aggressive that price skipped over levels without two-sided trade.
Because efficient markets tend to revisit inefficiently-traded areas, an unfilled FVG acts as a magnet: price frequently returns to fill part or all of the gap before continuing.
How traders use FVGs
An FVG in the direction of the trend is treated as a support/resistance zone for continuation entries — you wait for price to trade back into the gap and react. It pairs naturally with an order block at the same origin.
Not every gap fills, and a gap can be fully filled and then rejected. Treat the FVG as a zone of interest confirmed by structure, not a standalone trigger.
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Play Chart Bound free → Try today's Call the Candle →Frequently asked questions
What creates a fair value gap?
A strong, fast move that produces a three-candle sequence where candle 1's wick and candle 3's wick don't overlap, leaving an untraded gap covered only by the large middle candle.
Do fair value gaps always get filled?
No. Many are revisited and filled, but some are never fully filled. It is a probabilistic zone of interest, not a certainty.
Is a fair value gap the same as a price gap on the open?
Related but not identical. A weekend/open gap is a break in price between sessions; an FVG is an intraday three-candle imbalance that can occur without any session break.