Beginner📖 16 min read🏷 PD Arrays
FAIR VALUE GAPS (FVG)
The Most Traded ICT Concept — Imbalance, Magnet Zones, and How to Use Them
If you could only learn one ICT concept, the Fair Value Gap (FVG) would be the best choice. It is the most consistently predictive pattern in the entire methodology, it appears on every timeframe, every instrument, and it works because it's based on a fundamental truth about how markets function: price hates imbalance and will always return to fill it.
A bullish FVG: gap between candle 1 high and candle 3 low — price returns to fill it
// Lesson Content
A Fair Value Gap (FVG) is a three-candle price formation where the middle candle moves so aggressively that it leaves a price gap — a zone where no two-sided trading occurred.
Here's how to identify a Bullish FVG:
• Candle 1: any candle
• Candle 2: a large bullish candle (the "displacement" candle)
• Candle 3: the next candle
• The FVG = the gap between the HIGH of Candle 1 and the LOW of Candle 3
If Candle 3's low is ABOVE Candle 1's high — there is a gap where price skipped. That gap is the FVG. Price passed through it so fast that buyers and sellers couldn't meet there. The market is "imbalanced" in that zone.
Bearish FVG is the mirror: Candle 3's HIGH is below Candle 1's LOW after a large bearish displacement candle.
📌 The FVG is the gap between Candle 1's high and Candle 3's low (bullish). Mark it on your chart — price WILL return to this zone.
// Test Your Understanding
// KNOWLEDGE CHECK
1. A Fair Value Gap forms between...
2. CE (Consequent Encroachment) refers to...
3. An Inverse FVG (IFVG) forms when...
// What to study next
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