A Fair Value Gap (FVG) is an imbalance in price movement that shows where buying and selling weren’t equal — often caused by strong momentum from institutions.
In a candlestick chart, it’s a gap between candles where price moved too fast and skipped over levels with few or no trades.
Example
Candle A’s high is lower than Candle C’s low (with Candle B in between).
That leaves a gap between A’s high and C’s low.
It suggests inefficient price movement — price might later retrace into that gap before continuing upward.
Why traders care
Price often returns to fill part or all of the FVG before resuming its trend, making it a popular entry or retracement zone for smart money traders.
