A Fair Value Gap (FVG) is a three-candle imbalance where a fast move leaves a gap between the first candle's wick and the third candle's wick. Price often returns to fill this inefficiency before continuing.
How traders use it
- Price frequently retraces to fill the gap.
- FVGs mark zones of one-sided, inefficient trading.
- Use them as entry zones in the direction of the trend.
See it in dtcharts
Mark order blocks, gaps and liquidity on the chart in the dtcharts terminal with the drawing tools and Smart Money module.