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Mastering FVG: Fair Value Gap

The document explains the concept of Fair Value Gap (FVG) in trading, which represents a price imbalance during rapid market movements. It details various types of gaps, including Breakaway Gaps and Full-Fill scenarios, as well as optimal entry points like Consequent Encroachment (CE) and Institutional Order Flow Entry Drill (IOFED). Additionally, it discusses the significance of combining FVG with Order Blocks and Breaker Blocks for high-probability trading setups.

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Shaik.ismail
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26 views10 pages

Mastering FVG: Fair Value Gap

The document explains the concept of Fair Value Gap (FVG) in trading, which represents a price imbalance during rapid market movements. It details various types of gaps, including Breakaway Gaps and Full-Fill scenarios, as well as optimal entry points like Consequent Encroachment (CE) and Institutional Order Flow Entry Drill (IOFED). Additionally, it discusses the significance of combining FVG with Order Blocks and Breaker Blocks for high-probability trading setups.

Uploaded by

Shaik.ismail
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

FVG

MASTERING

FAIR VALUE GAP


TABLE OF CONTENTS
FVG
BAG
FULL FILL
CE(MIDPOINT)
IOFED
HIGH LOW SWEEP
FVG + OB
FVG + BREAK BLOCK
FVG
(FAIR VALUE GAP)

A Fair Value Gap (FVG) is a trading concept


representing a price imbalance where, during rapid
market movement, only buying or selling occurred,
leaving a "gap" in price action. Identified using three
consecutive candles, the gap exists when the first
candle's wick does not overlap with the third candle's
wick, leaving the second (middle) impulsive candle
isolated.
BAG
(BREAK AWAY GAP)

A Breakaway Gap in a Fair Value Gap (FVG) is a specific


type of unmitigated FVG created by an aggressive, high-
momentum price move that breaks through a key market
structure (like a swing high/low, or PD Array) and does
not return to fill the gap. It signifies strong directional
conviction, often leaving the gap area unmitigated.
FULL FILL
Full-Fill: This is considered as a 100% fill in FVG.

100% Fill = Imbalance Finished → The gap is fully mitigated, zone becomes weak.
• No Strong Reaction → After full fill, FVG usually doesn’t hold price.
• Trend Continuation Signal → Price often continues in the same direction.
• Avoid Re-entry → Taking trades again on the same FVG is low probability.
CE (MIDPOINT)
CE = CONSEQUENT ENCROACHMENT

50% Fill = Smart Entry Zone → CE (midpoint) is the most optimal entry inside FVG.
• High Reaction Probability → Price often reacts strongly from the midpoint.
• Institutional Interest → CE is where smart money usually steps in.
• Best Risk-Reward → Entries from CE give tighter SL and better RR.
IOFED
Instituitonal Order Flow Entry Drill

25% Fill = Early Entry Zone → Price reacts before reaching full FVG.
• Strong Trend Continuation → Indicates high momentum, shallow pullback.
• High Risk, High Reward → Early entries give best RR but need precision.
• Not Always Respected → Weak setups may ignore 25% and go deeper.
HIGH LOW SWEEP

Liquidity Grab Move → Market sweeps previous high/low to trap traders.


• Reversal/Continuation Trigger → After sweep, real move starts (often with FVG).
• Smart Money Entry → Institutions enter after taking liquidity.
• Best Confirmation Tool → Combine sweep + FVG = high probability setup.
FVG + OB
Image Shows Price Moved From OB + 50% FVG
(CE) Area.

Confluence Zone → FVG + Order Block together create a high-probability entry area.
• Strong Reaction Area → Price often reacts sharply from this combined zone.
• Smart Money Confirmation → OB shows institutional base, FVG shows imbalance.
• High Accuracy Setup → CE (50%) inside OB gives best entry precision & RR.
FVG + BREAKER BLOCK
Image Shows Price Moved From BB + 50% FVG
(CE) Area

Reversal to Continuation Zone → Breaker Block shows shift, FVG gives entry.
• Strong Confirmation Setup → BB + CE (50% FVG) = high-probability trade.
• Smart Money Flip Area → Previous zone flips (support ↔️ resistance).
• Precision Entry → Entry from CE inside BB gives tight SL & strong RR.

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