Fair Value Gap Trading: FVG Strategy & Fair Market Value in Forex

Welcome to Beirman Capital’s deep dive into the fair value gap trading strategy — an advanced yet easy-to-understand technique used by professional traders to take advantage of price inefficiencies. Whether you’re into forex, stocks, crypto, or indices, this guide is your roadmap to mastering FVG trading.

What is a Fair Value Gap (FVG)?

A fair value gap occurs when there's a sudden imbalance between buyers and sellers typically seen as a gap in price action between the closing of one candle and the opening of the next. This gap often signals institutional activity or high-impact market events.

Think of an FVG as a missing puzzle piece in your chart and that missing piece might just be your next big trade setup.

Types of Fair Value Gaps

Bullish Fair Value Gap

Formed during strong upward momentum. It’s the range between the high of the first candle and the low of the third candle in a 3-bar structure.

Bearish Fair Value Gap

Appears in aggressive downtrends. Defined by the price zone between the low of the first candle and the high of the third candle.

What Causes a Fair Value Gap?

1. Major News or Data Releases (NFP, FED meetings)
2. Market Sentiment Shifts
3. Institutional Order Blocks
4. High Volatility Periods
5. Imbalanced Supply & Demand Zones

These situations often trigger quick price movements that skip over fair market value creating an opportunity for traders who know where to look.

How to Trade Fair Value Gaps: A Step-by-Step Strategy

Step 1: Identify the FVG

Look for a three-candle pattern where the first and third candles don’t overlap. Tools like an FVG indicator or fair value gap scanner can help.

Step 2: Watch for Price to Revisit the Gap

Price tends to retrace into the gap zone before resuming its trend. This is your signal zone.

Step 3: Confirm with Indicators

Use tools like RSI, Bollinger Bands, or moving averages to validate the trade setup.

Step 4: Execute the Trade

Bullish FVG: Enter a long (buy) when price touches the gap zone.

Bearish FVG: Enter short (sell) as price revisits the gap.

Pros and Cons of FVG Trading

Pros

• Works Across All Markets – Forex, stocks, crypto, indices.
• Tracks Institutional Moves – Great for smart money traders.
• Lower Risk Entries – Gaps highlight precise price inefficiencies.
• Improves Trade Timing – Combines well with indicators.

Cons

• Doesn’t Guarantee a Fill – Price may not always return to the gap.
• Limited Setups – Appears mostly during high volatility events.
• Can Be Misleading in Choppy Markets – Confirm your entries.

Start FVG Trading with Beirman Capital

At Beirman Capital, we give you the tools, indicators, and education you need to make the most of powerful setups like the Fair Value Gap. Trade with precision using smart money concepts, high-speed execution, and expert guidance.

Open Your Trading Account Now and master FVG trading with confidence.

FAQ: Fair Value Gap Trading

What is a fair value gap?

It’s a price imbalance visible as a gap between two candles, signaling potential trade entries.

How to trade FVGs?

Identify the gap, wait for the price to return to it, confirm with indicators, and trade in the direction of the trend.

Is the fair value gap strategy only for forex?

No it works in stocks, crypto, commodities, and indices too.

What’s the best indicator for fair value gaps?

Use a Fair Value Gap indicator or a smart money concept scanner.

Final Thoughts

FVG trading is a game-changer when used with the right tools and strategy. By mastering fair market value and understanding price gaps, you gain a major edge in anticipating price moves and riding trends earlier.

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