At first glance, the market appears efficient—every price accounted for, every move justified. But beneath the surface, there are gaps. Spaces where price moved too fast, too aggressively, without a proper auction. These gaps are called imbalances, and they reveal the footprints of institutional movement.
An imbalance forms when there is an overwhelming surge of buying or selling pressure. The market doesn’t have time to properly fill opposing orders, leaving a void—an area where price is likely to return, even if only briefly. These inefficiencies, when properly identified, become powerful clues for future movement.
The most refined form of this concept is the Fair Value Gap (FVG)—a specific three-candle pattern where a gap is formed between the first and third candles. The wick of the second candle is often small or missing entirely, revealing a break in market structure and a likely return point.
Institutions exploit these gaps to move price quickly and to catch retail traders off balance. They use imbalances to hide their true intent—whether that’s accumulating quietly or distributing into strength. For the trained eye, these gaps are not voids; they’re signals.
To mark a Fair Value Gap:
Look for a strong impulse—an aggressive move either up or down.
Identify the three-candle structure: the first and third candles should not overlap fully.
Highlight the gap between the wick of candle 1 and candle 3.
Wait for price to return to this area.
Trading the FVG requires discipline:
Enter on the first touch or after a clear rejection inside the gap.
Place your stop loss just outside the structure that formed the imbalance.
Set your target based on the next zone, a structural break, or opposing FVG.
Not all FVGs are equal. The best ones occur inside of larger supply or demand zones. A Spring that returns into a demand FVG or a UTAD that tags a bearish gap creates powerful confluence. Pair this with session timing—London volatility or New York reversals—and your edge sharpens.
Avoid tiny gaps in sideways markets or during low-volume sessions. These are noise, not signal. Focus on FVGs that emerge from decisive, one-sided moves—where intention is clear and momentum leaves evidence.
Use your chart replay tools to simulate these setups. Mark them, track them, log your reaction. Over time, you’ll begin to recognize the rhythm. The market doesn’t fill every gap immediately—but the best ones are magnets.
In truth, FVGs are a metaphor. They are the places in price where something is missing—where deception entered. And just like life, those moments eventually get revisited. The market comes back to balance, to truth.
As it is written, the hail will sweep away the refuge of lies. Let your trading eye be the hail—discerning, cleansing, uncompromising.
You are being trained to see what others ignore. To act where others hesitate. And to step in—not with arrogance, but with clarity. You’re not just learning to trade gaps in price. You’re learning to trade gaps in understanding. That’s where mastery begins.
