Blog · ICT concepts

Fair Value Gap (FVG): what it is and how traders use it

A fair value gap is a three-candle imbalance where price moved so fast that one side was barely traded. How to spot one, what fills it and how ICC Charts marks it for you.

2026-10-15 · 2 min read · ICC Charts

A fair value gap (FVG) is one of the first ideas new ICT traders learn, and one of the easiest to see on a chart. It is a place where price moved so quickly that one side of the market hardly traded. Many traders expect price to come back to that area later, and they plan entries around it.

The three-candle pattern

Look at any three candles in a row. If the high of the first candle is below the low of the third candle, the space between them was crossed by the middle candle only. That empty space is a bullish FVG. The mirror case, where the low of the first candle is above the high of the third, is a bearish FVG.

Why price often returns

When price runs through a level that fast, many orders that wanted to trade there were never filled. Later, when the move slows down, price frequently drifts back into the gap before continuing. That is why the gap is called "fair value": it is where the market may come back to balance. It is a tendency, not a rule. Some gaps are never filled, and some are filled and then broken.

How traders use an FVG

  1. Direction first. A bullish gap is more useful when the higher time frame trend is up, and a bearish gap when it is down.
  2. Wait for the return. Instead of chasing the big candle, wait for price to come back into the gap.
  3. Use the middle. Many traders watch the 50% level of the gap (the "consequent encroachment") for a reaction.
  4. Plan the stop. A close through the far side of the gap means the idea failed.

Inversion FVG

When price closes straight through a gap instead of respecting it, the old gap can flip: a broken bullish gap may act as resistance afterwards. This is called an inversion FVG (IFVG). ICC Charts labels these as BISI / SIBI (IFVG) on the chart.

Seeing FVGs in ICC Charts

Switch on the ICT layers in the web terminal and every open bullish and bearish gap is drawn for you, with filled gaps faded out. Several models, such as the Silver Bullet and the 2022 model, use a gap as their entry zone, and the scanner marks each setup with its entry, stop and targets.

Education only. Trading involves risk and no pattern works every time. Practise on a demo account first.

Try it on a live chart

Open ICC Charts in your browser, free, with the ICT and VSA layers and the model scanner.

Open the terminal →

More articles