Fair Value Gap (FVG)
A three-candle imbalance where price moved so impulsively that a gap remains between the first candle's wick and the third's — an inefficiency price tends to revisit.
What is a fair value gap?
A fair value gap (also called an imbalance) forms in a three-candle sequence when the middle candle is so impulsive that the wicks of candles one and three don't overlap. In a bullish FVG, candle one's high sits below candle three's low, leaving a window of prices where essentially only buyers transacted. That one-sided window is an inefficiency: fair value was never established there.
Markets have a persistent tendency to revisit these windows — 'rebalancing' the inefficiency — because resting orders and value-seeking algorithms treat unfilled ranges as attractive. This makes FVGs both entry zones (price returns to the gap, then continues) and magnets (open gaps above/below act as draws on price).
Trading with FVGs
FVGs are strongest as part of the displacement sequence: a sweep, an impulsive shift that leaves a gap, then the retracement into the gap for entry with the trend of the displacement. The gap's midpoint (consequent encroachment) is a common refined trigger. Gaps left by structure-breaking displacement dramatically outrank gaps in chop.
Direction matters as much as the gap: a fresh bullish FVG below price in a bullish structure is a buy zone; the same gap in a broken structure is just a target on the way down. FVGs never override structure — they refine entries inside it.
How Pushing Profits applies it
The platform's imbalance scanner detects FVGs in real time across 200+ symbols and alerts when price returns to a fresh gap that aligns with equilibrium positioning and higher-timeframe bias. FVG confluence at an EQ level is one of the scored factors in the signal engine's quality threshold.
Frequently asked questions
Do all fair value gaps get filled?
No. Gaps created by genuine institutional repricing (earnings, regime shifts) can stay open for months or permanently. Trade gaps as confluence within structure, never as a standalone 'it must fill' thesis.
What's the difference between an FVG and a gap on the daily chart?
A daily gap (open vs prior close) is one form of imbalance. FVG methodology generalizes it: any three-candle displacement window on any timeframe is an inefficiency, whether or not the session gapped.
Which timeframe FVGs matter most?
Higher-timeframe gaps (daily, weekly) are stronger magnets and zones; lower-timeframe gaps are for entry refinement. A 5-minute entry inside a fresh daily FVG in discount is the classic nested setup.