Mastering Fair Value Gaps

Wiki Article

If you’ve ever wondered how institutions seem to “know” where price will revert before major moves, the answer often lies in Fair Value Gaps.

Plazo Sullivan’s methodology emphasizes that Fair Value Gaps act as magnets—not because retail traders watch them, but because institutions must mitigate the imbalance they caused.

Understanding the Anatomy of an FVG

A Fair Value Gap appears when a three-candle sequence creates a price void: the middle candle moves so quickly that it leaves an area untraded.

Why Smart Money Loves FVGs

Because institutions require massive liquidity, they often leave gaps behind due to the size of their orders.

A Simple, Professional FVG Workflow
1. Identify the Displacement

Before an FVG matters, there must be displacement—strong, directional movement marked by high volume or momentum.

Outline the Exact Imbalance Zone

This is the region where price is likely to return.

Patience Creates Precision

The best entries occur when price revisits the FVG, taps into it, and shows signs of rejection or continuation.

4. Align With Market Structure

An FVG entry aligned with higher-timeframe direction is exponentially more effective.

5. Use FVGs as Targets

Marking both bullish and bearish gaps creates natural take-profit levels.

The Institutional Edge FVGs Provide

They reveal where institutional orders entered, check here where they left inefficiencies, and where price is likely to return.

Combine FVG logic with market structure, liquidity pools, and volume confirmation, and you have one of the strongest frameworks available to retail traders today—one that aligns perfectly with the advanced methodologies taught inside Plazo Sullivan Roche Capital.

FVGs aren’t signals—they’re context.
And once you learn their language, the market starts to speak back.