📖 Financial Lexicon Term
What is Fair Value Gap (FVG)?
A massive imbalance in price delivery where a sharp move leaves a 'gap' between the wicks of the surrounding candles.
Detailed Explanation
An FVG is a core SMC concept representing market inefficiency. It occurs in a three-candle sequence where the first candle's high and the third candle's low do not overlap, leaving the second (middle) candle's body exposed. Institutions often push price back into this gap to rebalance the algorithm before continuing the trend.
💡 Practical Trading Example
After a massive bullish breakout, price dips back down to perfectly fill the FVG left behind, offering a high-probability buy entry.