Learning goal: Identify the three-candle FVG precisely and filter random gaps.
1Learn
Fair Value Gap — FVG
An FVG is an imbalance in a three-candle pattern where Candle 1 and Candle 3 wicks do not overlap.
How to identify it
An FVG is an imbalance in a three-candle pattern where Candle 1 and Candle 3 wicks do not overlap.
The middle candle carries displacement and the space between Candle 1/3 extremes defines the FVG. The source says price often revisits it—not always.
How it works, step by step
Number three candles and mark the wick gap for bullish or bearish direction.
The source logic is: The middle candle carries displacement and the space between Candle 1/3 extremes defines the FVG. The source says price often revisits it—not always.
Separate observation from interpretation: the numbers show only a price path; an SMC label still needs this lesson’s criteria. C1 high 101 | C2 body 102–108 | C3 low 105
Why it matters
Its practical importance is that FVG is a strong-move footprint and potential retracement AOI.
Place in the SMC sequence
FVG is a strong-move footprint and potential retracement AOI.
How it works, step by step
First, Number three candles and mark the wick gap for bullish or bearish direction.
Then, Valid case: Number three candles and mark the wick gap for bullish or bearish direction.
Finally, Invalid case: A meaningful FVG needs strong-move, structure and liquidity context.
Define invalidation before turning an observation into a trade.
How to identify it
Number three candles and mark the wick gap for bullish or bearish direction.
Valid case: Number three candles and mark the wick gap for bullish or bearish direction.
Invalid case: A meaningful FVG needs strong-move, structure and liquidity context.
After the observation, wait for subsequent behavior to confirm it.
Distinction from a related concept
Fair Value Gap — FVG
An FVG is an imbalance in a three-candle pattern where Candle 1 and Candle 3 wicks do not overlap.
Any gap
A meaningful FVG needs strong-move, structure and liquidity context.
Two directional scenarios
↗ Supported case
C1 high 101 | C2 body 102–108 | C3 low 105: Valid case: Number three candles and mark the wick gap for bullish or bearish direction. In a bullish scenario, Number three candles and mark the wick gap for bullish or bearish direction.
↘ Interpretation trap
C1 high 101 | C2 body 102–108 | C3 low 105: Invalid case: A meaningful FVG needs strong-move, structure and liquidity context. In a bearish scenario, Number three candles and mark the wick gap for bullish or bearish direction.
⚠ Common mistakes
First error: labeling without criteria in Fair Value Gap — FVG
Second error: confusing it with Any gap
Third error: turning an observation into an immediate entry without a model or risk control.
✓ Practical checklist
Number three candles and mark the wick gap for bullish or bearish direction.
Valid case: Number three candles and mark the wick gap for bullish or bearish direction.
Invalid case: A meaningful FVG needs strong-move, structure and liquidity context.
This concept is not a guaranteed entry or profit; stop, position size and model rules remain mandatory.
2See an example
Guided exercise · 1
Guided: split the sequence into observable events and write only evidence actually present in the data. C1 high 101 | C2 body 102–108 | C3 low 105
123FVG
Number three candles and mark the wick gap for bullish or bearish direction.
123FVG
Which observation is a valid instance in the displayed scenario? Topic: Fair Value Gap — FVG
3Practice
Practice
Guided practice
Guided: split the sequence into observable events and write only evidence actually present in the data. C1 high 101 | C2 body 102–108 | C3 low 105
?↔✓
Gold V3 Open Response
💡 The emphasized element is a clue; still submit the answer yourself. Number three candles and mark the wick gap for bullish or bearish direction. Separate observation from interpretation: the numbers show only a price path; an SMC label still needs this lesson’s criteria.
Expected answer
100 تا103.
Assisted practice
Assisted: write one supported and one rushed interpretation of the same sequence, then state the filter that rejects the weak reading. C1 high 101 | C2 body 102–108 | C3 low 105
?↔✓
Gold V3 Open Response
Expected answer
خیر؛ همپوشانی وجود دارد و فاصله مثبت High1→Low3 باقی نمانده.
Independent practice
Independent: before seeing continuation, record the likely reading, required confirmation and invalidation on three separate lines. C1 high 101 | C2 body 102–108 | C3 low 105
?↔✓
Gold V3 Open Response
Expected answer
پاسخ موردی؛ تشخیص هندسی و ارزیابی Context باید جدا ثبت شوند.
What to retain
Its practical importance is that FVG is a strong-move footprint and potential retracement AOI.
FVG is a strong-move footprint and potential retracement AOI.
Mental model: observe → label conditionally → wait for subsequent behavior → decide only inside a risk plan.