Fair value gaps (FVG): imbalance you can see

A fair value gap forms when one candle moves so fast that the candles on either side do not overlap. In a bullish FVG, the high of candle one is below the low of candle three. The space between them is the gap.

A gap means orders were filled on one side only. The market tends to revisit those levels to offer the other side, which is why FVGs act like magnets and like support or resistance on the way back.

At the New York open, gold jumps 120 pips in a single 15-minute candle. Looking at the candle before and the candle after, there is a clear space between them: a bullish FVG.

Over the next hour, price drifts back down into that space. It slows near the middle of the gap, volume dries up on the down candles, and buyers step in again. The gap acted as support on the way back.

If that FVG also overlaps an order block and sits in discount, it becomes one of the strongest zones you can mark.

• Expecting every gap to fill completely. Strong trends often fill only part of a gap, or none.
• Treating the gap edge as an exact line. Work with the zone and expect overshoot.
• Trading gaps against structure. A bullish FVG in a clear downtrend is more likely to break.
• Ignoring news. Gaps created by a news spike can behave unpredictably for a while.

Gaps do not only hold. When price closes straight through one, it often comes back and respects it from the other side. And when a bullish and a bearish gap overlap, the overlap (BPR) is one of the tightest, most precise zones in Smart Money trading.

RTC AI draws normal gaps in teal, inversion gaps as purple dashed boxes and BPR in yellow, each with its own switch in Layers.

• Prefer gaps created by a move that also broke structure.
• Prefer gaps in discount for buys and premium for sells.
• Combine with an order block: an OB plus an FVG is stronger than either alone.
• Ignore tiny gaps on very low timeframes during quiet hours.