Fair Value Gap (FVG)

A fair value gap (FVG) is a three-candle price pattern where the first and third candle's ranges don't overlap, leaving a visible gap in the middle candle's range. It reflects a stretch where price moved fast enough in one direction to skip past a range it never traded through — a genuine imbalance between buyers and sellers, rather than the normal back-and-forth of price discovery.

Traders reference fair value gaps because price often returns to "fill" that skipped range later, trading back through it before continuing (or reversing). That tendency is why the gap gets marked and watched, not because the gap itself predicts direction.

Inverse fair value gap (IFVG)

An inverse fair value gap is what traders call an FVG that gets fully broken through rather than holding as support or resistance. Instead of acting as a zone price respects and reacts to, price trades straight through it — and once that happens, some traders treat the same zone as flipped: an area that failed to hold, now read as a level in the opposite direction. It's the same three-candle structure, just relabeled based on how price actually behaved at it afterward.