Volume and volatility

FVG: fair value gap

An FVG is the gap left between the wicks of the candles on either side of a strong candle. In that range price traded only in one direction, and quickly. Later candles can come back into the gap and fill it partly or completely.

The dashed box marks the gap between the first candle's high and the third candle's low. After the point where the wick enters, the box covers only the remaining gap.

What is an FVG?

Three consecutive candles are looked at. When the middle candle pushes strongly, the wick of the first candle and the wick of the third candle may not overlap. In the range between them price passed only within the middle candle, in one direction. That range is called a fair value gap (FVG).

The difference from a price gap is this: in a gap there is no trading at all between two candles. In an FVG the candles are continuous; the gap is only between the wicks of the first and third candles.

The term FVG also comes from the "Smart Money Concepts" approach. This page treats it as a measurable three-candle pattern.

Directions

Bullish FVG (↑): the third candle's low is above the first candle's high. The gap runs from the first candle's high to the third candle's low.
Bearish FVG (↓): the third candle's high is below the first candle's low. The gap runs from the third candle's high to the first candle's low.

A bullish FVG fills from the top down, a bearish FVG from the bottom up.

How a gap fills

The candles after an FVG forms can come back into the gap. The gap's state is read from how deep that return goes.

Untested No candle has touched the gap.
First touch A wick has entered only a small part of the gap and no candle body has entered it.
Partly filled Price has gone deeper into the gap but has not reached its far end. The remaining gap gets smaller.
Fully filled A wick has reached the far end of the gap. The gap is closed.
Invalidated A candle has closed beyond the far end of the gap. The push that created the gap has been reversed.

What it shows, what it does not prove

What it shows

That price moved through a range in one direction, and quickly
How much that range has been revisited since
A way to measure the strength of a move against ATR

What it does not prove

That price must come back to fill the gap
That the gap will act as support or resistance
That the gap shows a "fair value" or the orders of large players

The MarketLevelMap view

How it relates to zones

In MarketLevelMap's Price Action view FVGs are shown by these rules.

FVGs are calculated only on the 4H, 1D and 1W charts; there are none on 1H or on the Critical Zones charts.
Only closed candles are used. The middle candle's body and the gap's width must exceed a certain size relative to ATR to filter out noise.
Only open FVGs (untested, first touch, partly filled) close to the latest price are drawn; the nearest one per direction, so at most one FVG ↑ and one FVG ↓.
The box shows only the remaining gap; it shrinks and fades as the gap fills. The colour is neutral grey, because an FVG is a move, not a zone.
The fill is updated with the closed candles after the analysis; the panel says "Fill as of …".

Often confused with

For general information only. Not investment advice.Last updated: 26 October 2026