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Fair Value Gap (FVG / Imbalance)

Fair Value Gaps represent sudden price inefficiency caused by one-sided liquidity flow. Markets naturally gravitate back to fill or rebalance this void.

Identification Rules & Structural Requirements

Checklist required before validating this formation.

  • 1.Candle 1: Initial directional move.
  • 2.Candle 2: Large momentum expansion candle with strong displacement.
  • 3.Candle 3: Fails to overlap with Candle 1 wick, creating a distinct price void.
  • 4.Entry placed upon retest into the 50% midpoint (Consequent Encroachment) of the gap.
Invalidation Criteria:

A full candle close beyond the boundary of the gap void.

Execution Discipline

Trade this setup with mathematical R:R

A chart pattern only provides positive expectancy when your reward targets exceed your risk boundaries. Always compute your position size and breakeven win rate before executing.

Active & Graded Calls Demonstrating Fair Value Gap (FVG / Imbalance)

Empirical evidence from TradeDiscuss's public prediction ledger.

USDJPY short1h
adam_c44
Live
1
Entry
154.594
Stop
156.924
TP1
150.740
Conviction
high

This USDJPY short level is critical today as it retests a key support, with high volume confirming liquidity sweep. Invalidation occurs above 135.50, where price breaks resistance and enters new territory.

GBPUSD short1h
nataliwright
Live
1
Entry
1.34905
Stop
1.36900
TP1
1.31510
Conviction
low

GBPUSD's 1.3550 level is critical today as it's a major support retest, with high volume confirming liquidity sweep. Invalidation occurs above 1.3575, negating short bias.

1,000💬 1
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