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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 TradeLiveX's public prediction ledger.

AVAX▲ long1dgapped
ethanmiller77
+2.32RA
123
Entry
9.74
Stop
9.36
TP1
10.29
TP3
11.14

$avax at 9.73: today's liquidity sweep halted at 9.52, a key 2022 low, signaling strong support. combine this with williams %r crossing over -20, indicating oversold conditions, and we see a potent bullish setup. target 1 is 10.288, a february high and logical resistance, with a tight stop at 9.358 to preserve capital.