Fair value gap (FVG)(Fair value gap (imbalance))
The gap in a three-candle sequence where the wicks of the first and third candles do not overlap; a zone left imbalanced by a fast move and frequently filled back in.
Also written as: fair value gap · FVG
An FVG marks an area the price passed through one-sidedly, with little opposing-side trading. The market usually fills this "imbalance" partially or fully, which is why a pullback into an FVG in the direction of the trend is used as an entry zone.
Higher-timeframe FVGs are more reliable. Not every gap gets filled; an unfilled FVG is a sign of strong momentum.