Ever looked at a chart and wondered why price sometimes seems to “jump” and leave empty space that never really got traded? Traders call this the fair value gap, and it’s one of those little-known market phenomena that can completely change how you see price action. In prop trading floors, it’s whispered like a secret weapon—because if you understand where those gaps are and why they exist, you start seeing opportunities that others miss.
In technical analysis, a fair value gap (often abbreviated FVG) is that area on a price chart where there’s an imbalance between buyers and sellers. It’s usually the result of a sudden price move—driven by heavy institutional orders—that skips over certain prices without enough trades happening there.
Think of it like this: you’re on a highway, and traffic suddenly accelerates so fast that the cars leave a big empty space behind. That empty space? In market terms, it’s a gap in liquidity, a zone the market may want to “revisit” later to rebalance.
In Forex, for example, an aggressive USD buy can push EUR/USD down so quickly that the candles leave a visible gap in the order flow. In stocks, earnings surprises can cause similar jumps. Even in crypto—where markets run 24/7—you’ll see FVGs when high-volume bots push prices through several levels in seconds.
Proprietary (prop) trading desks survive on precision. Missing a gap could mean missing the trade of the week. FVGs help them:
A prop trader in London once explained it to me over coffee: “The chart tells you where the money was too impatient to wait. That’s where the money will check back in.”
When you trade multiple assets, the skill is transferable. The more charts you study, the more you train your eyes to spot those imbalances in seconds.
Trading is going through a transformation. Decentralized finance removes middlemen but sometimes creates unique liquidity imbalances. Smart contracts can trigger moves that mimic FVG patterns. Add AI-driven algorithms to the mix, and we’re heading into a future where machines may spot, trade, and even fill gaps before a human sees them.
Prop trading firms are already running hybrid desks—half human intuition, half machine precision. FVG detection is one of the skills being automated, but the human edge remains in interpreting why the gap mattered and whether it’s worth trading.
If you’re serious about trading, whether in forex, stocks, crypto, or commodities, learning to read fair value gaps is like unlocking an X-ray vision for charts. It’s pattern recognition with razor-sharp purpose. It’s where impatience meets opportunity.
Slogan: “Find the imbalance, ride the correction.”
Trade them right, and gaps stop being a mystery—they become your signal.
If you want, I can also give you a short, catchy meta description for this that would work on Google and social platforms. Do you want me to add that?
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