What is Fair Value Gap?
A fair value gap (FVG) is a three-candle pattern in which the wicks of the first and third candles do not overlap, leaving a gap inside the middle candle's range.
How it works
The term comes from ICT teaching. The gap marks a stretch of price that traded in one direction with little two-way trading, and followers expect price to return later to fill some of it. Traders mark the gap as a zone and look for entries when price revisits it.
What it can't tell you
Gaps form constantly on every timeframe, so a rule needs extra conditions to be selective, and each added condition is another chance to overfit the past.
Does it work as a strategy?
No registry-backed rule count is attributed to Fair Value Gap. The linked test pages say what was measured for it, and in what form.
Tickfloor's research desk has backtested 517 strategies, most against an equal-weight benchmark of the same assets rebalanced daily that pays no costs (the strategies pay theirs). After correcting for the 598 tests run (Benjamini-Hochberg), 0 passed. That does not prove no strategy works. These are historical diagnostics, not validation under Testing Standard v2: the backtest harness predates that standard and has not been re-run to meet it.
General information only. It doesn't consider your objectives, finances or needs. Tickfloor holds no financial services licence and never places trades.
Common questions
What is Fair Value Gap?
A fair value gap (FVG) is a three-candle pattern in which the wicks of the first and third candles do not overlap, leaving a gap inside the middle candle's range.
How does Fair Value Gap work?
The term comes from ICT teaching. The gap marks a stretch of price that traded in one direction with little two-way trading, and followers expect price to return later to fill some of it. Traders mark the gap as a zone and look for entries when price revisits it.
What are the limits of Fair Value Gap?
Gaps form constantly on every timeframe, so a rule needs extra conditions to be selective, and each added condition is another chance to overfit the past.