A Fair Value Gap is a three-candle imbalance. When price moves so fast that it leaves a gap between the wick of candle 1 and the wick of candle 3, that gap is an FVG. The market left an area with no trading — an imbalance — and price tends to return to "fill" it because markets seek efficiency.
How to Spot an FVG
Look at three consecutive candles. If the wick of candle 1 and the wick of candle 3 don't overlap — there's a gap between them — that's an FVG. A bullish FVG forms during an up move (gap between candle 1 high and candle 3 low). A bearish FVG forms during a down move.
Why FVGs Work
Institutions can't always fill their entire order in one move. An FVG represents unfilled institutional interest. When price returns to the gap, it provides the liquidity for those remaining orders. This is why gaps often act as magnets — price gets pulled back to fill them before continuing the trend.
Trading FVGs
- ▸As entry zones: in an uptrend, wait for price to pull back to a bullish FVG, then enter long.
- ▸As targets: if you're short and there's an unfilled bullish FVG below, it's a likely magnet — take profit there.
- ▸Combine with order blocks: an FVG inside an order block zone is a high-probability entry area.
- ▸Higher timeframe FVGs are stronger — an H4 FVG is more significant than an M15 one.
When a Fair Value Gap overlaps with an order block, you have two SMC concepts agreeing on the same zone. That's confluence — and confluence is what separates a 40% setup from a 65% setup. CURIO's Pro engine marks both, so overlaps are immediately visible.