Fair Value Gaps

A Fair Value Gap (FVG) is just when price spikes up or down so fast, that buyers/sellers do not have enough time to counteract the movement. Which creates an imbalance in the market.

When the market has these imbalances, it will often want to return to this untested price and try to test it again. Most of the time, rejecting back to where it was previously.

You would measure this area by taking the candle's wick before the big spike & taking the candle's wick after the spike. This zone is the untested area (Fair Value Gap).

These fair value gaps can be used as entries and/or exits.

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