The Fair Value Gap (FVG) is a price range where one side of the market liquidity is offered, typically confirmed by a liquidity void on the lower time frame charts in the same price range.
Price can “gap” to create a literal vacuum in trading, resulting in an actual price gap.
Fair Value Gaps are most commonly used by price action traders to identify inefficiencies or imbalances in the market, indicating that buying and selling are not equal.
If you’re following the ICT Trading Strategy or Smart Money Concepts, this indicator can be a valuable tool for your trading.
HOW TO USE FVG
Simply applying the FVG indicator to your chart will show you the existing Fair Value Gaps. This straightforward indicator automatically provides users with targets that are often filled as they represent market imbalances.
To fully understand how to use the FVG indicator, I recommend learning about the smart money concepts from ICT.