In today's modern trading world, the Smart Money Concept (SMC) has become quite popular. However, there's a hidden weapon in this concept that very few people use — Fair Value Gap (FVG).
FVG is the zone where the market moves so fast that some price levels aren't touched — it's the area where institutions trade heavily. This strategy creates a sniper-level edge for retail traders.
In this article, we will discuss in detail:
What is FVG?
Why institutions come back to fill FVG.
How you can identify FVG on mobile charts.
How FVG is combined with market structure, order block, and liquidity sweep.
Real-life examples on the Binance app.
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What is Fair Value Gap (FVG)?
Fair Value Gap is an imbalance that occurs when the price moves so quickly that it skips the price between some candles.
Bullish FVG Example:
Candle 1: Bearish.
Candle 2: Strong Bullish (impulse move).
Candle 3: Small bearish or doji candle.
Gap: The high of Candle 1 and the low of Candle 3 — price does not touch within this range.
This gap shows an imbalance in the market where smart money aggressively bought, but not all orders got filled — which is why the price comes back to fill this zone later.
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How Institutions Use FVG.
When institutions trade with large volumes, they can't get all the liquidity at one point. That's why they push the price rapidly and later bring it back to fill the remaining orders.
This is the reason:
The FVG zone is referred to as a magnet.
Price often retraces to fill the FVG.
Smart traders trade this retracement.
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How to Apply the FVG Strategy (Step-by-Step).
1. Identify the Trend: First, look at the major trend or market structure (Bullish or Bearish BOS).
2. Mark FVG: Look for a 3-candle formation where the middle candle is strong and there's a gap between the first and third.
3. Wait for Retracement: When the price comes back into that FVG zone, wait for the confirmation candle.
4. Entry: On the confirmation candle or within the FVG zone.
5. Set Stop Loss: Below FVG or below the recent swing.
6. Take Profit: At previous highs, equal highs/lows, or liquidity zones.
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FVG + Market Structure = High Accuracy.
When you combine market structure (like BOS or CHoCH) with FVG, your winning ratio improves significantly.
Bullish Example:
The market broke the previous high (BOS).
The FVG was created during that impulsive move.
Price retraced back into the FVG.
Got a confirmation candle, entry time.
Target previous high or liquidity grab.
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FVG + Order Block = Powerful Confluence.
If your FVG forms inside or near an Order Block (OB), it makes the trade even stronger. Because:
OB is the base of smart money.
FVG is an imbalance zone.
The convergence of both indicates strong institutional interest.
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FVG + Liquidity Sweep = Sniper Entry.
When the price sweeps a support/resistance or equal highs/lows (stop-loss hunting) and then enters the FVG zone, it becomes the best entry zone.
Example:
The price swept liquidity by breaking the recent low.
Then it moved into a bullish FVG.
Entry on the confirmation candle.
Below the SL sweep.
Target: next resistance.
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Best Timeframes for FVG.
4H & 1H: To identify strong institutional zones.
15min & 5min: For confirmations and entries.
1min (only for pro scalpers): Use with HTF confluence.
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FVG on Mobile Charts (Binance App):
1. Open TradingView on the Binance app.
2. Select 1H or 4H chart (e.g., ETH/USDT).
3. Identify the FVG zone (using the rectangle tool).
4. Set an alert when the price touches the FVG.
5. Look for confirmation on lower timeframes (15min or 5min).
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Live Example (Mobile Chart - BTC/USDT):
Bullish BOS appeared on the 1H chart.
The impulse candle created an FVG from $62,000 to $62,600.
The next day, the price returned to fill the FVG at $62,300.
Bullish engulfing confirmation on 15min.
Entry: $62,350 | SL: $62,100 | TP: $63,200+.
Result: Strong 3x profit with minimal risk.
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Risk Management:
Risk per trade: No more than 1–2%.
SL: Always at a logical place (below FVG/OB).
TP: According to structure or multiple TP strategy.
Alerts & Journaling: Record every FVG trade for learning.
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Conclusion: FVG is a Game-Changer.
The Fair Value Gap strategy is a smart money-based proven concept that protects you from retail traps and allows you to trade along with the flow of institutions.
If you are learning SMC or aiming for pro-level trading, the FVG strategy is a must-have. Just remember — never use FVG alone. Use with confluences like:
Market Structure.
Order Blocks.
Liquidity Sweeps.
HTF Analysis.
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