{"id":653029,"date":"2025-03-28T15:00:04","date_gmt":"2025-03-28T14:00:04","guid":{"rendered":"https:\/\/ftmo.com\/?p=653029"},"modified":"2025-09-26T15:36:45","modified_gmt":"2025-09-26T13:36:45","slug":"boost-your-trading-edge-with-the-fair-value-gap-strategy","status":"publish","type":"post","link":"https:\/\/ftmo.com\/en\/boost-your-trading-edge-with-the-fair-value-gap-strategy\/","title":{"rendered":"Boost Your Trading Edge with the Fair Value Gap Strategy"},"content":{"rendered":"

Have you ever noticed sudden price movements in the market and wondered how to take advantage of them? The Fair Value Gap (FVG) strategy<\/strong> is a powerful price action method that helps traders spot aggressive market moves.<\/em><\/p>\n

What is the Fair Value Gap strategy?<\/h2>\n

A Fair Value Gap<\/strong>\u00a0refers to a price gap created by aggressive buying or selling pressure. These imbalances indicate strong institutional activity, providing traders with high-probability trade setups. It is also known as an imbalance<\/strong>, Price Value Gap<\/strong>, or 123 gap<\/strong>.<\/p>\n

\"\"<\/a><\/p>\n

When is an FVG formed?<\/h2>\n

FVGs typically occur during periods of high market volatility, often triggered by:<\/p>\n

\u2022 Key economic reports: <\/strong>interest rate changes, GDP reports, and inflation data (CPI).
\n\u2022 Geopolitical events: <\/strong>war, natural disasters, and major political shifts.
\n\u2022 Large institutional orders: <\/strong>heavy buying or selling by banks, hedge funds, or major investors.<\/p>\n

When these factors cause sharp price movements, a gap is created between candles, offering a potential trading opportunity.<\/p>\n

How to trade using the FVG strategy<\/h2>\n

The Fair Value Gap<\/strong> strategy is a price action method that works well in both trending<\/strong> and range-bound markets<\/strong>. Unlike indicator-based strategies, it relies solely on price action, making it ideal for beginners and advanced traders as well.<\/p>\n

Entry rules example for trading the Fair Value Gap<\/strong><\/h3>\n

1. Identify the FVG: <\/strong>look for a gap between three consecutive candles.<\/p>\n

2. Trade in the direction of the gap: <\/strong>if the middle candle is bullish, enter a long trade. If it\u2019s bearish, take a short trade.<\/p>\n

\"fair<\/a><\/p>\n

\n

3. Enter at the nearest edge of the gap.<\/strong><\/p>\n

4. Invalid entry: <\/strong>if the entry is not triggered within four candles after the gap candle, the setup is invalid.<\/p>\n

5. Ignore overnight gaps<\/strong>: FVGs do not include price gaps that occur due to market closure.<\/p>\n

Exit rules example: Stop Loss & target strategy<\/strong><\/h3>\n
Stop Loss placement:<\/h6>\n

\u2022 For a long position<\/strong>, place the stop loss at the lower edge<\/strong> of the middle (gap) candle.
\n\u2022 For a short position<\/strong>, place the stop loss at the upper edge<\/strong> of the middle (gap) candle.<\/p>\n

\"\"<\/a><\/p>\n

Target strategy:<\/h6>\n

\u2022 First target: <\/strong>set at a 2:1 Reward-to-Risk Ratio (RRR) (i.e.,<\/strong> if risking $100, target $200).
\n\u2022 Move Stop Loss to break even or last gap: <\/strong>once the first target is reached, move the Stop Loss to the entry price (break even) or to the last gap (depends if another gap was formed between the 1st target and entry).
\n\u2022 Trailing Stop for additional profits: <\/strong>if the price continues in your favour, move your Stop Loss to the last FVG gap level to secure further gains. Every time a new FVG forms, adjust your Stop Loss until it gets hit.<\/p>\n

Important note<\/strong>: If there is no additional FVG between your entry and the first Profit Target, simply set the Stop Loss to break even<\/strong> and wait for another FVG to be formed.<\/p>\n

Trade demonstration with trailing Stop Loss<\/h3>\n

\"fair<\/a><\/h3>\n

Why use the FVG strategy?<\/h2>\n

\u2022 Simple & Indicator-Free: No need for complex indicators, making it beginner-friendly.
\n\u2022 Works in Multiple Market Conditions: Effective in trends, consolidations, and reversals.
\n\u2022 Precision-Based Entries & Exits: Clear rules eliminate emotional trading.<\/p>\n

\"\"<\/a><\/p>\n

\n
\n

All information provided on this site is intended solely for educational purposes related to trading on financial markets and does not serve in any way as a specific investment recommendation, business recommendation, investment opportunity analysis or similar general recommendation regarding the trading of investment instruments. FTMO only provides services of simulated trading and educational tools for traders. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local laws or regulations. FTMO companies do not act as a broker and do not accept any deposits. The offered technical solution for the FTMO platforms and data feed is powered by liquidity providers.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Have you ever noticed sudden price movements in the market and wondered how to take advantage of them? The Fair Value Gap (FVG) strategy is a powerful price action method that helps traders spot aggressive market moves. What is the Fair Value Gap strategy? A Fair Value Gap\u00a0refers to a price gap created by aggressive […]<\/p>\n","protected":false},"author":44,"featured_media":666650,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[162],"tags":[],"class_list":["post-653029","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trading-systems"],"acf":[],"yoast_head":"\nBoost Your Trading Edge with the Fair Value Gap Strategy | FTMO<\/title>\n<meta name=\"description\" content=\"Master the Fair Value Gap trading strategy and find out how to enter and exit trades with precision using price action alone.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ftmo.com\/en\/boost-your-trading-edge-with-the-fair-value-gap-strategy\/\" \/>\n<meta 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