Fair Value Gap (FVG)
A three-candle imbalance where price moved so fast it left a gap between the first candle's high and the third candle's low.
What it is
A Fair Value Gap forms across three candles when the middle candle is so impulsive that the first candle's high (in an up move) never overlaps the third candle's low. That untraded zone is the 'gap': a footprint of one-sided order flow where the market skipped price levels instead of auctioning through them.
Why it matters
Price can return to fill or partially fill a gap before it continues, so traders who use FVGs mark them as possible entry zones for continuation trades and as levels to be aware of when one sits above or below an open position.
NQ example ILLUSTRATION
NQ sweeps a low, then prints a 60-point bullish candle. The gap between candle one's high and candle three's low is the FVG. A retrace into that zone followed by a rejection is the classic continuation entry.