Trends/Gaps and breakouts

Fair value gap

A three-bar shape where the first bar's high and the third bar's low do not overlap.

Gaps and breakoutsBest on 1D, 5D, 3MAlso called imbalance, FVG

Illustration of the fair value gap shape. It is a sketch, not real price data.

What it shows

A fair value gap uses three bars. If the high of bar 1 is lower than the low of bar 3, the space between them was not traded by bar 2's range. It is a gap inside a fast move.

The name comes from newer online trading education. The rule is simple: the zone between the high of bar 1 and the low of bar 3.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Take three consecutive bars.
Bullish: low of bar 3 > high of bar 1.
Zone = high of bar 1 to low of bar 3.
Mark zones that price has not returned to.

Starting values: Bars 3; Min size 0.5% of price. These are proposed and will be tuned on real price data before launch.

How to read it

The gold zone is the space no bar's range overlapped.
The tall middle bar made the move.
Later price may return to the zone.

Status labels you may see

Label	What it means
Open gap	A zone price has not entered.
Filled	Price has traded through it.
None	No gap in the last 30 bars.

What cancels it

Filled when price trades through the whole zone.

What traders check next

Distance to the zone.
How many bars ago.
Higher timeframe context.

Limits

Newer concept with limited research.
Plenty of gaps appear in fast markets.
Zone sizes vary a lot.

Try it in forecastviz

Open any ticker and choose Gaps and breakouts → Fair value gap in the left menu.
Switch between 1D, 5D, 3M to see how the picture changes.
Compare with Gap levels and Gap fill on the same chart.

Open on a ticker

Questions

How is it different from a gap?

A regular gap is between two bars. This is across three.

Is there evidence it works?

We make no claim.