Fair Value Gap (FVG) — Understanding Market ImbalanceGoldOANDA:XAUUSDReubenMilesA Fair Value Gap (FVG) is a price imbalance created when the market moves aggressively in one direction, leaving an inefficient area between candles. Traders often watch these imbalance zones because price may later return to the FVG before continuing its move. 🟢 Bullish FVG A bullish FVG forms during strong bullish displacement. The general three-candle structure is: Candle 1 high < Candle 3 low This creates an unfilled price area between the first candle's high and the third candle's low. 📌 Potential idea: When price returns into the bullish FVG, traders may look for bullish confirmation before considering a buy. ⚫ Bearish FVG A bearish FVG forms during strong bearish displacement. The general structure is: Candle 1 low > Candle 3 high The area between them represents the bearish imbalance. 📌 Potential idea: When price retraces into the bearish FVG, traders may look for bearish confirmation before considering a sell. 🎯 How Traders Can Use FVG 1. Identify the market's overall direction. 2. Look for strong displacement. 3. Identify the three-candle FVG. 4. Mark the imbalance zone. 5. Wait for price to retrace into the FVG. 6. Look for confirmation such as BOS, CHOCH, liquidity sweep, or rejection. 7. Define your stop loss and target before entering. 8. Maintain proper risk management. 📌 Key Takeaway FVG = Market Imbalance Strong displacement → imbalance created → price retraces → confirmation → potential continuation. Mastering FVGs can help traders better understand market inefficiency, retracements, and price delivery. Educational purposes only. Always manage your risk.