Understanding Fair Value Gaps (FVG) - ICT Concepts

how's it going everyone this video is going to be over pair value gaps what is a fair value Gap what is a busy what is a city what is consequent encroachment as well as inversion we will also touch on the difference between a fair value Gap a volume and balance and a gap the first thing we are going to go over is what is a fair value Gap a fair value Gap is a three Candlestick pattern where the first candle low does not overlap with the third candle's high or where the first candle high does not overlap with the third candles low let's take a little bit of a deeper look into that if we take a look at this candle slow and drag it out and this candle's high and drag it out because this high does not overlap with this low this is now a fair value cap going over to this example this Candlestick high does not overlap with this Candlestick slow so this is also a fair value Gap so now that you understand what a fair value Gap looks like what doesn't it look like if we were to extend this candle slow down to here and this candle is high up to here let's drag the high and low across and see if there is a gap when dragging the high and low across you can see that they overlap the low from the first candle is lower than the high of this third candle so there's no Gap there and this is not a fair value Gap similarly over here if we were to extend this high up and this low down you can see that there is overlap between the first candles High and the third candle slow meaning there is no fair value Gap here so just to clarify a gap between the first candles low and the third candle is high or the first candle's High and the third let's go over a few examples of finding fair value gaps so if you look right here we have our first candles low extend that out and our third handle is high extend that out there is a gap between this candle's low and this candle is high