How To Master Fair Value Gaps + LIQUIDITY Like a PRO | Full Guide

Hey traders, welcome back to another video. Fair value gaps might not be what you think. Most traders misinterpret and misuse them, which often leads to consistent losses. In this video, we're going to fully unpack the concept of fair value gaps, one of the most powerful yet commonly misunderstood tools in trading. We'll explore all the different types and models of FGS you'll encounter on your charts. More importantly, I'll walk you through how to spot high probability fair value gaps and trade them with greater accuracy by using clear, repeatable rules. I'll also share my two favorite FEG setups, breaking them down step by step so you can implement them right away, no matter what market you're trading. If you find this helpful, don't forget to like the video and subscribe to the channel if you're new here. I will see you after the intro. Welcome back traders and let's get right into it. So, what exactly is a fair value gap? An FVG shows up on your chart when the market experiences an imbalanced price move, usually caused by a sudden surge in one direction without any meaningful pullback. These aggressive movements leave behind zones where liquidity was skipped. essentially price inefficiencies which appear as gaps between candles. These gaps often act like magnets drawing the price back to them over time. Because of this, FEGs are high probability areas for potential trade entries. Price often reacts after revisiting and rebalancing these levels. And before we go deeper, let's quickly review what inefficient price delivery actually means. There are three major forms of price inefficiency. The first one is fair value gaps. It usually forms across three candles where the wicks of the candles on either side don't fully overlap the body of the middle candle. This creates a clear gap drawn from the body of that middle candle. Price often returns to fill this space, making it a critical area to watch. The second form of price inefficiency is volume imbalances. This occurs when there's a discrepancy between the close of one candle and the open of the next. Even though trades happened, the volume is unevenly distributed.