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Smart money concepts

Fair value gap (FVG) — definition & meaning

An imbalance on the chart left by a fast move that price may revisit.

A fair value gap is a three-candle imbalance where price moved so quickly it left a gap between wicks, suggesting one side was far more aggressive.

SMC traders expect price to 'rebalance' by returning to fill part of the gap. Like other SMC ideas it is a probability-based concept, not a guarantee, and it fails often enough that stops are essential.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Order block
A price zone where large institutional orders are thought to have entered.
Liquidity sweep
A quick move to grab stop orders before reversing the other way.
Imbalance
A zone where buying and selling were very one-sided, often a gap.
Gap
A jump in price with no trading in between, leaving a blank on the chart.
Smart money
A term for large institutional players assumed to move markets.
Market structure
The pattern of highs and lows that defines a trend or range.

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