I've noticed that many traders still don't fully utilize the Fair Value Gap, yet it is one of the most useful concepts for understanding how the market moves. Essentially, a fair value gap forms when the market moves so quickly that it leaves an imbalance between supply and demand, creating a sort of price void that the market tends to fill.

Think about it: when you see an aggressive candle that jumps beyond the previous one without overlap, that space represents an area where no activity occurred. The market perceives it as an imbalance and often returns to correct it, just like a magnet that pulls the price toward that level.

To identify these gaps, you need to look at the structure: a typical sequence is a candle that follows the trend, then one that moves away creating the imbalance, and finally a third that continues in the same direction. The gap between the first and the third is your fair value gap. It works particularly well in highly volatile markets, especially in forex and cryptocurrencies where movements are more aggressive.

Where they become interesting is in actual trading. I personally always wait for confirmation before entering: seeing the gap alone isn't enough; you need to see how the price reacts when it reaches it. If you notice a reversal pattern or a break of a key level, then you have a more solid setup. Combine the fair value gap with other tools, like Fibonacci retracements or moving averages, and you significantly increase your chances of success.

The rule that has saved me multiple times is this: trade in the direction of the trend. In an uptrend, the gap acts as support; in a downtrend, as resistance. And above all, be disciplined with entries and exits. Place your stop loss just outside the gap, set your take profit at a logical level, and never risk more than 1-2% per trade.

The mistakes I see repeatedly are: overtrading every gap that appears, ignoring the overall market context, and entering too early without confirmation. It’s not complicated, but it requires patience. The fair value gap is a powerful tool when used correctly, combined with serious risk management and solid technical analysis. If you learn to recognize these patterns and trade with discipline, you'll have a real advantage over those who still throw money around randomly.