Fair Value Gaps

Fair Value Gaps settings

Fair Value Gaps (FVG) are market imbalances identified within a sequence of three candles.

These gaps occur when the wicks of the outer candles do not overlap the body of the central candle, creating a range between the wicks that marks the Fair Value Gap.

A bullish Fair Value Gap forms when the current low is higher than the high two bars prior.

Conversely, a bearish Fair Value Gap occurs when the current high is lower than the low two bars prior.