Fair value gaps (FVG and iFVG)
A three-candle imbalance. Price often returns to fill it before continuing.
What it is
A fair value gap appears when a fast move leaves a gap between the first candle’s high and the third candle’s low (bullish case): the middle candle’s range was not fully traded by both sides. Price frequently returns to rebalance that zone.
An inverse FVG (iFVG) forms when price closes through a gap in the opposite direction; the same zone can then flip its role and act as support or resistance.
How to use it
- Find gaps created by strong impulsive moves in the trend direction.
- Mark the zone from candle 1 high to candle 3 low.
- Look for entry when price returns, with a reaction candle or flow confirmation.
- Stop beyond the far side of the gap; target the impulse high.
Gaps are zones to react to, not signals on their own.
Common mistakes
- Trading every gap on every timeframe.
- Ignoring that gaps get fully filled and invalidated.
- Entering without checking the higher-timeframe direction.
Practise it in TradeDesk X
FVG and iFVG are layers on the TradeDesk X chart, with 20 independent confluence checks in the Scanner including FVG-related ones.
Related lessons
🎯
Order blocks
The last opposite candle before a strong move marks where large orders may remain.
🎯Premium and discount zones
Split a swing in half. Buy cheap, sell expensive.
Educational content only. Nothing here is financial advice or a recommendation to buy or sell anything. Trading leveraged products can lose more than you deposit. Practise with paper trading first and never risk money you cannot afford to lose.