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What Is a Fair Value Gap (FVG)? How to Trade Them in Crypto

If you've spent any time in trading communities, you've seen the term FVG — Fair Value Gap. It sounds complicated. It isn't. An FVG is simply a sign that price moved too fast in one direction, leaving an imbalance behind that the market often comes back to fill.

What a Fair Value Gap actually is

A Fair Value Gap is a three-candle pattern. Look at any strong, impulsive move and check the middle candle: if there's a gap between the wick of the first candle and the wick of the third candle, that empty space is an FVG. It represents a zone where one side (buyers or sellers) was so aggressive that orders didn't get filled efficiently — an imbalance.

Why price comes back to "fill" the gap

Markets seek liquidity and efficiency. When a fast move leaves an imbalance, there are usually unfilled orders sitting in that gap. Price frequently retraces back into the FVG to "mitigate" it — tapping the zone, filling those orders — before continuing. That retrace is the trade.

  • Bullish FVG: forms on an up-move; can act as support on the pullback.
  • Bearish FVG: forms on a down-move; can act as resistance on the bounce.

How to trade an FVG (simple framework)

  1. Confirm the higher-timeframe trend first — trade FVGs with the trend, not against it.
  2. Mark the FVG zone after an impulsive move.
  3. Wait for price to return into the gap and show a reaction (a rejection or structure shift).
  4. Enter with a stop beyond the gap and a target at the next structure or S/R zone.

Not every gap gets filled

This is the part most "FVG gurus" skip: in a strong trend, some gaps stay open for a long time, and some never fill. That's why a fresh, unmitigated FVG with the trend behind it is higher quality than an old one. Treat FVGs as a magnet and a zone of interest — not a guarantee.

Want the system, not just the theory?

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Scoring FVGs automatically

Eyeballing which gaps matter is hard. The AI-Predict indicator surfaces FVGs as they form and attaches a mitigation score, so you can quickly judge whether a gap is fresh and worth watching or already worked through. Stacked with the trend ribbon and S/R zones, it turns "is this a good FVG?" into a glance instead of a guess.

Key takeaways

  • An FVG is an imbalance left by a fast, three-candle move.
  • Price often retraces to mitigate the gap before continuing.
  • Trade FVGs with the trend; prefer fresh, unmitigated gaps.
  • Always define your stop and target — an FVG is a zone, not a signal to blindly follow.

Educational content only. Not financial advice. Trading and crypto involve substantial risk of loss — never risk money you cannot afford to lose.