What is FVG and why is it important?FVG = FAIR VALUE GAP
An area that offers price inefficiencies
Simply put, when there are more sellers than buyers it sometimes causes a void in the price action that we call it FVG or Fair Value Gap.
You can simply identify these areas on the chart just by finding deserted candles that have no trading history around them.
These value gaps are like errors in the market, price always tends to back to those areas and fill the gap with some more trades.
So if you see a sell-off/bullish impulse on the market, try to find The FVG and mark it as the potential target for the price to jump back there whenever the trend starts to shift.
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Fairvaluegap
ICT IMBALANCE / FVG / LIQUIDITY VOIDLiquidity void, Fair Value Gap, Imbalance... These terms are interchangeable.
As a Charter Member ill tell you what I've shown here, is a basic depiction, as I got asked a question on what is an imbalance?
An imbalance, is an imbalance in price, where price has NOT efficiently delivered orders in the market, price will like to revisit these areas, of imbalance, as seen here. The diagram on the left depicts the ideal model of what an imbalance is, the chart on the right is an in time example.
if you notice one of these getting filled, at a place where you are bearish/bullish... well.... there is your trade!
EDUCATIONAL POST (FVG - Fair Value Gap)EDUCATIONAL POST: (FVG - Fair value Gap) ๐๐
Let's take some time to explain a trading term I often use in my TA. ๐ค
FVG - or Fair Value Gap (= inefficiency, void...)
๐ What they mean by that is an area of the chart where the price moved past in just 1 single candle, meaning the candle before + after haven't touched this area.
๐ This is how such a gap is formed.
๐ This gap frequently works as a magnet for the future price, indicating a CONTINUATION (bullish โ> bounce, bearish โ> drop)
NOTE: this is the strongest on the first touch it does, after that it's power deminishes and price often moves back through it.
EXAMPLE: (bullish) price moves up fast and creates a FVG. This area will act as a bounce area for when the price drops back down to this, before continuing higher. I've added a theoretical + $BTC example. (scroll back to see it on the chart)
Hope you learned something. ๐
Oli ๐ค


