FVG — the gap price leaves behind

In plain words

When a lift goes straight from the 3rd floor to the 9th, nobody gets on or off in between. When price is pushed hard in one direction, the same thing happens: across a few candles there is a price range it passed through with almost no trading.

That skipped range is called an FVG (Fair Value Gap). On a chart it shows up as an empty space between candles.

Many traders think price often comes back later to fill that space, so they keep an eye on it. It does not always come back, though — this article shows both cases.

The concept

Three candles

Call three candles in a row 1, 2 and 3. Candle 2 is the big move.

• Bullish FVG — if candle 3’s low is above candle 1’s high, the range between them (candle 1 high to candle 3 low) is the gap.
• Bearish FVG — if candle 3’s high is below candle 1’s low, the range between them (candle 3 high to candle 1 low) is the gap.

Wicks count. If the wicks of candles 1 and 3 overlap at all, there is no FVG. Candle 2 crossed that range on its own.

Why “fair value”?

The SMC explanation goes like this: when orders pile up on one side and price rushes through, buyers and sellers never properly meet in that range. The step where both sides settle on a price was skipped, so price is thought likely to pass back through later and trade there.

A real Bitcoin 4-hour chart (September–October 2025; dates and times in Korean time, as on the chart axis). The 9 pm candle on 29 September jumped, leaving about 1,000 USDT empty between the previous candle’s high, 112,421.99 USDT, and the next candle’s low, 113,449.74 USDT. The green box is this bullish FVG.

The next day the 5 pm candle dipped to 112,656.27 USDT, into the gap, but did not reach its bottom edge (112,421.99 USDT). Price then rose to 126,199 USDT on 7 October, leaving more gaps on the way up — the green boxes higher up.

Filling

• If price dips into the gap and leaves, it is partly filled.
• If price reaches the gap’s far edge (the bottom, for a bullish FVG), it is fully filled — no longer a gap.

An analogy

Roll paint quickly across a wall and you leave thin stripes you missed. A careful painter comes back later to touch them up.

• The FVG is the missed stripe.
• Filling is coming back to touch it up — sometimes only half way.
• But a busy painter may just move on to the next wall. A stripe being there does not mean anyone will come back.

In practice

Gaps that agree with the trend

An FVG is read together with market structure, not on its own. If the swing trend is up, a bullish FVG is a candidate spot where price may pull back and then rise again; in a downtrend, the other way round. Gaps against the trend are thought to get fully filled more often.

How far in?

• Near edge — where price first touches. Sometimes it turns right there.
• Middle — half of the gap. Many people watch this line on its own (they call it CE, Consequent Encroachment).
• Far edge — reach it and the gap is fully filled.

The 29 September gap above was entered past its middle (about 112,936 USDT), close to the far edge, before price turned.

Gaps that never fill

The drop from the night of 10 October 2025 into the early hours of the 11th. Three 4-hour candles fell hard in a row and left two bearish FVGs — 119,456.28 – 120,916.44 USDT and 117,214.64 – 118,500 USDT (red boxes). The rebound topped at 115,963.81 USDT on the 9 am candle of 13 October, short of even the lower box. Both boxes are still there at the end of this chart (21 October).

A gap is “a place that may be filled some day”, not “a place that will be filled”. Do not assume price will come back just because there is a gap.

Going deeper

Each timeframe has its own gaps

A small gap on the 1-hour chart can vanish inside a single 4-hour candle. Gaps on larger timeframes are left by bigger moves, so many people give them more weight.

Very thin gaps

The first chart also has a gap of only about 88 USDT — 113,677.23 to 113,765.42 USDT, on the 1 am candle of 1 October. Many people ignore gaps this thin. Our chart does not filter by size, so it draws them too — judge by the box’s thickness.

Next to an order block

The last opposite candle before a swing structure break is called an order block (next article). Turn order blocks on over the same candles as the first chart and the 5 am order block of 1 October (113,765.42 – 114,754.87 USDT) is slightly overlapped at its top by the 5 pm gap of the same day (114,740 – 116,363.38 USDT). Many people pay extra attention where the two overlap.

After a full fill

Some read a gap that price has run straight through as flipping its role (an iFVG, inverse FVG). Our chart removes fully filled gaps, so it does not draw these.

On our chart

Chart tab › SMC button › Add-ons › FVG (Fair value gap).

• Structure (Swing, or Swing + internal) must be on. With structure off the check is greyed out and nothing is drawn, but your choice is kept.
• FVG and order blocks start checked. Structure starts off.
• The rule is the one above — candle 3 low > candle 1 high is bullish, candle 3 high < candle 1 low is bearish. No size filter.
• The box starts at the middle (2nd) candle and runs to the right edge of the chart. Bullish is green, bearish red — the candle colours. The “FVG” label sits inside the top of the box at the right edge; if the box is narrower than the label or the label would overlap another, only the label is hidden.
• From the candle after candle 3 on, once a low reaches the bottom of a bullish FVG (for a bearish FVG, a high reaches its top), the gap counts as fully filled and is removed. A wick is enough. Partly filled gaps stay.
• Only the 5 most recent unfilled gaps are drawn.
• The candle still forming is left out. Only the candles the chart loaded (500 from Binance, 200 from Upbit) are searched, so older gaps do not show.

Next: where big players left their orders — order blocks.