Fair Value Gaps
- Indicators
- Cao Minh Quang
- Version: 2.5
- Updated: 20 November 2024
The Fair Value Gap (FVG) is a price range where one side of the market liquidity is offered, typically confirmed by a liquidity void on the lower time frame charts in the same price range.
Price can "gap" to create a literal vacuum in trading, resulting in an actual price gap.
Fair Value Gaps are most commonly used by price action traders to identify inefficiencies or imbalances in the market, indicating that buying and selling are not equal.
If you're following the ICT Trading Strategy or Smart Money Concepts, this indicator can be a valuable tool for your trading.
An ICT Inversion Fair Value Gap, or reverse FVG, occurs when a fair value gap fails to hold its price, resulting in the price moving beyond and breaking the gap. This situation marks the initial change in price momentum.
Simply applying the FVGindicator to your chart will show you the existing Fair Value Gaps. This straightforward indicator automatically provides users with targets that are often filled as they represent market imbalances.
To fully understand how to use the FVGindicator, I recommend learning about the smart money concepts from ICT.
If you are interested in this indicator, you might be interested in the more advanced indicators that I provide:
For MT5:
Fair Value Gaps with Order Block Detector
For MT4:
Fair Value Gaps with Order Block Detector
Very powerful indicator