Fair Value Gap (FVG)
A Fair Value Gap is an inefficiency spotted across three candles: the second is so impulsive that the wick of the first and the wick of the third don’t overlap — the untraded space left behind forms the gap. Bullish version: the BISI (from candle 1’s high to candle 3’s low); bearish version: the SIBI. The market often comes back to “rebalance” these zones — with the midpoint of the gap (Consequent Encroachment, 50%) acting as a reaction point — but nothing forces an FVG to be filled: in a strong trend, some never are, and an FVG that gets traded through simply flips polarity (IFVG). A key Smart Money concept, to be traded within context, never in isolation.
See also
Any zone where price has only moved in one direction.
The last accumulation candle before an impulsive move.
An approach that follows the footprints of large institutional players.
How easily an asset can be bought or sold without moving its price.