Fair Value Gaps Part 1

Fair Value Gaps Part 1Lesson 4 of 85 min read

Not a gap

The lookalike: a big candle between two small ones whose outer wicks overlap, which proves orders were resting inside it.

Most big candles on your chart are not fair value gaps. The shape is easy to see and easy to get wrong.

The lookalike

Here is a set that looks right at a glance.

Candle 1 reaches up to 2,406. Candle 2 is large and green. Candle 3 sits above it and looks like the third candle of a gap.

Then you check candle 3's lowest point. It is 2,403.

Figure 1 · Three gold candles that look like a gap: candle 1 topping at 2,406 and candle 3 wicking down to 2,403, the two wicks crossing, marked as no gap

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