Zones · Beginner · 3 min read
Fair value gap (FVG): the gap a big candle leaves
Three candles, one big middle candle, and a price zone that never traded. What an FVG is and how to spot one.
A fair value gap is a three-candle pattern. The middle candle is big and fast (a displacement). It moves so quickly that candle 3 never overlaps candle 1: a price zone is left where almost no trading happened.
SMC says price tends to come back to fill that gap, and that the gap then acts as support (bullish gap) or resistance (bearish gap).
- 80 real 4h candles of BTC/USDT · Crypto (perpetual futures) · 2026-06-19 → 2026-07-02. The code found this example, not us: it is the most recent one in our data.
- Three candles. The middle one is a big bearish candle (a 'displacement'): its body is 1.4 times the average candle range.
- Candle 3 never overlaps candle 1: between 60 031 and 61 029 (1.7 % of price) no trade happened on the way down. That empty zone is the fair value gap.
- 1 candles later, price comes back into the gap. SMC traders wait for this retest to enter in the gap's direction.
- What happened next: 10 candles later, price was +1.8 % from the close of the marked candle. One example proves nothing; the test below counts thousands.
How to spot one
- Find a big candle, clearly bigger than the ones around it.
- Bullish: the low of the candle after it is above the high of the candle before it.
- Bearish: the mirror, the high after is below the low before.
- The zone between those two prices is the gap.
Flip the cards
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Quick check
Which candle makes the gap?
One example on a chart is not evidence. The box below is: it counts every trade our code took on years of data.
What we measured when we tested it
Fair value gap (FVG) · Each row is one kind of market. Settings tried, share that made money after fees, markets.
| Market kind | Settings tried | Made money after fees | Markets |
|---|---|---|---|
| Crypto (perpetual futures) | 772 | 62 % | 16 |
| Stock market (indices) | 506 | 18 % | 2 |
| Commodities | 757 | 27 % | 3 |
Our verdict: No edge after costs. Read the full test →
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Education about how markets and tests work. Not financial advice.