📌 What Is a Fair Value Gap (FVG)?
A Fair Value Gap is one of those concepts that sounds complex but is beautifully simple once you see it.
When price moves so fast and so aggressively in one direction that it skips over a zone without proper two-sided trading, meaning buyers and sellers never truly met at those prices, it leaves behind an imbalance. That imbalance is called a Fair Value Gap.
A Bullish Fair Value Gap specifically forms during a strong upward move. It appears as a visible gap or thin zone on the chart where: This zone often acts as a point of interest in future price action. Markets have a natural tendency to revisit these areas, not always, not guaranteed,but frequently enough that they are widely watched by traders across all levels. When price returns to a bullish FVG, it is essentially returning to a zone where buyers once stepped in so aggressively
🚩 The Flag Pattern - A Pause Within the Move
After a strong, sharp move upward, often called the flagpole, price doesn't simply continue in a straight line. It breathes. It consolidates. It digests the gains.
This consolidation phase, when it forms as a parallel channel drifting slightly downward or sideways, is called a Flag Pattern. The upper boundary and lower boundary of this channel run roughly parallel to each other, hence the name, it visually resembles a flag hanging from a pole.
📊 Volume — The Heartbeat of Both Patterns
Volume ties everything together, and in this chart, it tells a very coherent story across both structures.
During the Bullish FVG formation:
Volume spikes sharply. This is expected and meaningful. A Fair Value Gap that forms on low volume is a weak imbalance. One that forms on high volume tells you that a large number of participants were aggressively involved in that move
⚠️ Disclaimer: This post is entirely educational and observational in nature. All chart patterns, concepts, and structures discussed are shared purely for learning purposes and to explain how these patterns visually appear on a chart. This is not financial advice, not a trade call, and not a directional forecast of any kind. No bias toward bullish or bearish outcomes is implied or intended.
A Fair Value Gap is one of those concepts that sounds complex but is beautifully simple once you see it.
When price moves so fast and so aggressively in one direction that it skips over a zone without proper two-sided trading, meaning buyers and sellers never truly met at those prices, it leaves behind an imbalance. That imbalance is called a Fair Value Gap.
A Bullish Fair Value Gap specifically forms during a strong upward move. It appears as a visible gap or thin zone on the chart where: This zone often acts as a point of interest in future price action. Markets have a natural tendency to revisit these areas, not always, not guaranteed,but frequently enough that they are widely watched by traders across all levels. When price returns to a bullish FVG, it is essentially returning to a zone where buyers once stepped in so aggressively
🚩 The Flag Pattern - A Pause Within the Move
After a strong, sharp move upward, often called the flagpole, price doesn't simply continue in a straight line. It breathes. It consolidates. It digests the gains.
This consolidation phase, when it forms as a parallel channel drifting slightly downward or sideways, is called a Flag Pattern. The upper boundary and lower boundary of this channel run roughly parallel to each other, hence the name, it visually resembles a flag hanging from a pole.
📊 Volume — The Heartbeat of Both Patterns
Volume ties everything together, and in this chart, it tells a very coherent story across both structures.
During the Bullish FVG formation:
Volume spikes sharply. This is expected and meaningful. A Fair Value Gap that forms on low volume is a weak imbalance. One that forms on high volume tells you that a large number of participants were aggressively involved in that move
⚠️ Disclaimer: This post is entirely educational and observational in nature. All chart patterns, concepts, and structures discussed are shared purely for learning purposes and to explain how these patterns visually appear on a chart. This is not financial advice, not a trade call, and not a directional forecast of any kind. No bias toward bullish or bearish outcomes is implied or intended.
🏆 WHATSAPP ME : wa.me/919455664601
🏆 MY TELEGRAM : t.me/hashtaghammer
🏆 MY BOOK ( TRADING IS AN EMOTION ) : tinyurl.com/TradingISanEMOTION
🏆 MY TELEGRAM : t.me/hashtaghammer
🏆 MY BOOK ( TRADING IS AN EMOTION ) : tinyurl.com/TradingISanEMOTION
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
🏆 WHATSAPP ME : wa.me/919455664601
🏆 MY TELEGRAM : t.me/hashtaghammer
🏆 MY BOOK ( TRADING IS AN EMOTION ) : tinyurl.com/TradingISanEMOTION
🏆 MY TELEGRAM : t.me/hashtaghammer
🏆 MY BOOK ( TRADING IS AN EMOTION ) : tinyurl.com/TradingISanEMOTION
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.