In the fast-paced world of financial markets, understanding and identifying market imbalances can be a valuable skill for traders. One such phenomenon that reveals these imbalances is the fair value gap in trading (FVG). This blog post aims to provide a comprehensive understanding of the fair value gap, its identification, and its implications for traders.

What is the Fair Value Gap (FVG) Explained

The ICT fair value gap in trading refers to a specific price pattern observed within a three-candle sequence on a price chart. It is characterized by a large central candle surrounded by neighboring candles with upper and lower wicks that do not fully overlap the range of the large candle. This pattern indicates a rapid price spike or drop that occurs too quickly for buyers or sellers to effectively counteract, leading to an imbalance in the market.


How To Identifying the ICT Fair Value Gap in trading (FVG):

To identify a ICT fair value gap fvg, traders can follow these steps:

 Examine the Candlestick Pattern: Look for a large central candle that stands out from its adjacent candles, visually representing the price spike or drop.


Analyze Upper and Lower Wicks: Assess the upper and lower wicks of the neighboring candles. If these wicks do not fully overlap the range of the large central candle, it indicates the presence of a fair value gap.

Consider Time frame: Fair value gaps are typically observed within a short time-frame, such as intraday or daily charts, but can occur in any time frame.

Bullish Fair Value Gap:

A bullish fair value gaps or FVG occurs when the price rapidly spikes upward, creating an imbalance in favor of buyers. 

This can be a result of positive news, strong market sentiment, or other factors that drive prices higher. 

Traders often interpret this pattern as a potential buying opportunity, anticipating further price appreciation.

bullish fvg|fair-value-gaps|

Bearish Fair Value Gap:

Conversely, a bearish fair value gap or FVG arises when the price experiences a rapid downward movement, favoring sellers. Negative news, market pessimism, or other catalysts can trigger this pattern. Traders may interpret this as a potential selling opportunity, expecting further price declines.


Trading with Fair Value Gaps (fvg):

Consider the following strategies fair value gap trading

Micheal Huddleston presents an exceptional strategy for fair value gaps trading. This strategy comprises three key components:

  1. Timing: The first component of the ICT trading strategy is time, which holds utmost importance. When searching for fair value gaps in kill zones, ICT defines these zones as the times when high trading setups occur. Typically, they coincide with market openings such as the London Open or the New York Open.
  2. Liquidity: Liquidity can be observed on the chart through buy stops or sell stops. In our kill zone, we patiently await a liquidity hunt. Following this hunt, the market often creates imbalances on shorter time frames, usually within 3 to 1-minute intervals.
  3. Entry with Risk Management: We wait for the market to return and fill these imbalances in fair value gaps. By employing proper risk management techniques, we then enter into trades.

Fair Value Gap Example

Currently on 28-6-2023 fair value gap is present on 4H time frame on EURUSD and we took short position EURUSD. The chart illustrate the fair value gap examples


Another short opportunity of Short is available on BTCUSD pair. The below chart will show that


Fair Value Gap Indicator Tradingview

Fair value gap indicator is the easiest way to find fair value gaps in trading. To add FVG indicator you just open trading view and click on Add indicator

One of the best fair value gap indicator on trading view is luxalgo fair value gap indicator. That automatically find fvg on any time frame and highlights it.



The fair value gaps trading is a significant price pattern in trading that highlights market imbalances resulting from rapid price movements. By understanding and identifying fair value gaps, traders can gain insights into potential trading opportunities. 

With a balanced approach, traders can leverage the fair value gap to enhance their decision-making process and strive for profitable outcomes in the dynamic world of financial markets.

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