A Fair Value Gap is a three-candle structural pattern that represents an imbalance or inefficiency in price delivery. It occurs when a highly aggressive candle moves rapidly in one direction, leaving an area where only one side of the market (either buyers or sellers) was delivered.
IPDA delivers prices to specific levels to accomplish two goals: seeking liquidity (stopping out retail traders) or rebalancing inefficiencies (filling fair value gaps).
Searching for a free "ICT notes PDF" is step one. Step two is execution. Here is how to avoid the common pitfall of "analysis paralysis." inner circle trader ict forex ict notespdf
Look at a sequence of three candles. If the low of Candle 1 does not touch or overlap with the high of Candle 3, the empty space between them on Candle 2 is the Fair Value Gap.
Found below clean relative equal lows (EQL), swing lows, and old daily/weekly lows. This is where buyers place their sell-stop loss orders. A Fair Value Gap is a three-candle structural
A break in the current trend (e.g., a break of a recent higher low in an uptrend) signaling a potential reversal.
: Highlighting the importance of risk management in ICT trading. Searching for a free "ICT notes PDF" is step one
ICT setups often offer 1:3, 1:5, or higher RR ratios.
: A signal indicating the end of the current trend and the beginning of a new one, confirmed by the breaking of a recent swing high or low.
[Step 1: Daily Bias Assessment] │ ▼ [Step 2: Identify Liquidity Targets (BSL/SSL)] │ ▼ [Step 3: Wait for the Killzone Window (Time)] │ ▼ [Step 4: Spot Stop Hunt & Market Structure Shift (MSS)] │ ▼ [Step 5: Entry at the Fair Value Gap (FVG)] Step 1: Establish Daily Bias
: Large orders from institutions can significantly impact market prices. Identifying areas where these institutions might place orders can provide trading opportunities.