22/09/2025
I want to share something that often goes unnoticed on the chart but can completely change the way you look at price movement.
Sometimes the market moves so aggressively that it skips over certain levels without fully trading them.
Think of it like a shopkeeper skipping a customer in a long line; eventually, they have to go back and attend to the person who was ignored.
On the chart, that skipped area is called an imbalance or a Fair Value Gap (FVG). Price tends to return there before continuing its journey, and that pullback often sets up some of the most reliable trades you’ll find.
𝐒𝐨, 𝐰𝐡𝐚𝐭 𝐞𝐱𝐚𝐜𝐭𝐥𝐲 𝐢𝐬 𝐚𝐧 𝐅𝐕𝐆?
It’s a gap left behind when price pushes too quickly in one direction, leaving no chance for the opposite side to transact. The market doesn’t like imbalance, so it usually comes back to fill the gap before deciding its next move.
Here’s how you spot them:
- 𝐁𝐮𝐥𝐥𝐢𝐬𝐡 𝐅𝐕𝐆: Price surges upward. In a three-candle move, the wick of the first candle and the wick of the third don’t meet. The space in between is the gap.
- 𝐁𝐞𝐚𝐫𝐢𝐬𝐡 𝐅𝐕𝐆: The same concept in reverse. Price drops aggressively, and the first and third candle wicks leave a gap on the downside.
Traders care about these gaps because they often act like magnets; that is to say, price is naturally drawn back to them.
But what makes them truly powerful is when an FVG forms right next to a supply or demand zone (I explained these zones in last week’s post).
When price pulls back to fill the gap and taps into the zone at the same time, it often creates one of the cleanest trade setups you can find.
Here’s the practical takeaway:
- In a bullish gap, look for buying opportunities when price retraces into the gap and begins to show strength.
- In a bearish gap, look for selling opportunities as price pulls back into the gap and starts to reject.
So far, we’ve covered Market Structure, Supply and Demand Zones, and Fair Value Gaps. In the next post, we’ll dive into the final strategy.
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