What Is a Fair Value Gap (FVG)?

The short answer

A fair value gap (FVG) is an imbalance left by a violent move — the gap between candle 1's high and candle 3's low when the middle candle is a big impulse. Price didn't trade "fairly" through that zone, so it tends to come back and fill it.

The shaded band is the gap the impulse skipped — a magnet for price.

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How an FVG forms

When price moves so fast that the middle candle's body leaves a gap between the wick of the candle before it and the candle after it, that un-traded zone is the FVG. It represents an imbalance — far more aggression on one side than the other in that instant.

Why price comes back to fill it

Markets tend to seek "fair value," so an unfilled FVG acts like a magnet — price often returns to fill some or all of it before continuing. A bullish FVG (left by an up-move) can act as support on the revisit; a bearish FVG as resistance.

FVG + order block = a stronger zone

An FVG is the effect of a strong move; an order block is the cause. When an unfilled FVG sits right on top of an untouched order block, you've got a high-interest zone. Only unfilled FVGs are worth watching — once filled, the imbalance is gone.

Hamster's note: FVGs taught me patience. Instead of chasing the rocket, I mark the gap it left behind and wait for the retrace. Sometimes price fills it and flies; sometimes it ignores me. That's why it's a zone, not a guarantee.

Quick check — a huge green candle leaves a gap below it. What is it, and what's likely?

A bullish fair value gap. Price often comes back to fill some of that gap (where it may find support) before potentially continuing up — though, like any single tool, it works best with confluence.

Key takeaways

An FVG is the imbalance gap left by a fast move (candle 1 high → candle 3 low).
Price tends to return and fill it — a magnet and a reaction zone.
Only unfilled FVGs matter; FVG + order block = stronger.

Glossary: Fair value gap Order block Liquidity sweep The Method

Hamster keeps it real: Plenty of FVGs never get filled, and plenty fill then keep going the wrong way. It's a magnet bias, not a guarantee — trade it like a lean, not a certainty.

FAQ

What is a fair value gap (FVG)?

A fair value gap is an imbalance left by a fast price move, defined as the gap between the first candle's high and the third candle's low (when the middle candle is a strong impulse). Price tends to return and fill the gap, so it acts as a magnet and a reaction zone.

Why does price fill fair value gaps?

Markets tend to seek fair value, and an FVG marks a zone price moved through too quickly to trade efficiently. Price often returns to fill some or all of that gap before continuing, which is why traders watch unfilled FVGs as likely reaction areas.

What's the difference between an FVG and an order block?

An order block is the cause of a move (the candle where big orders were filled); a fair value gap is the effect (the imbalance the impulse left behind). They are strongest when they overlap — an unfilled FVG sitting on an untouched order block.

Do filled fair value gaps still matter?

Much less. Once an FVG has been filled, the imbalance it represented is gone, so it loses its pull. Traders focus on unfilled FVGs as the ones price is still likely to revisit.