Listen, if you've been trading for a while, you know well that the market is not always rational. There are moments when the price moves so quickly that it leaves completely uncovered zones behind, and that's where the Fair Value Gap comes into play. It’s one of those concepts that once understood, you start seeing everywhere on the charts.

Basically, the Fair Value Gap is that zone where the market has moved too fast, creating an imbalance between supply and demand. Imagine three candles: the first moves in one direction, the second moves away creating the gap, and the third continues the movement leaving the gap unfilled. There you have your FVG. The market tends to return there sooner or later to rebalance, like a magnet.

To identify it, just observe the price action. Look for a large candle that moves aggressively, then check the space between the high of one candle and the low of the next without overlap. It’s especially evident in volatile markets like crypto or forex, especially after important news that causes rapid movements.

Why is it important? Because these gaps really act like price magnets. The market returns to visit them to fill the imbalance, making them dynamic support and resistance zones. If you know how to trade FVGs correctly, you’re looking at high-probability setups.

Now, how to successfully trade FVGs? First, don’t jump in as soon as you see the gap. Wait for confirmation, whether it’s an reversal pattern or a break of a key level. Second, always combine it with other tools—moving averages, Fibonacci, trend lines. If your FVG aligns with a 50% Fibonacci retracement, then you’ve got something serious.

Third key point: trade in the direction of the trend. In an uptrend, FVGs acting as support are your allies. In a downtrend, look for those acting as resistance. Entry must be clear—enter when the price reacts to the gap, place your stop just outside the FVG area, and take profit at a logical level like the next zone or a measured move.

Manage risk as if it’s the most important thing, because it is. Position sizing, risk-reward ratio—never risk more than 1-2% of your capital per trade. I’ve seen skilled traders ruined by poor risk management.

The most common mistakes? Overtrading every single gap—not all bring profits, be selective. Ignoring the market context—a FVG in a sideways market is practically useless. And above all, rushing—premature entries are the fastest way to burn accounts.

The reality is that FVG trading, when done right, gives you a real advantage because you’re exploiting inefficiencies that the market naturally creates. Combine this with discipline and risk management, and you have a solid strategy. Whether you’re new or experienced, learning to recognize and trade these gaps can make a real difference in your performance.