Fair Value Gaps (with mitigation)
A fair value gap (FVG) is a three-candle imbalance: the low of a candle sits above the high of the candle two bars earlier (bullish), or its high sits below that candle's low (bearish). The middle candle moved so fast that no trading happened in the gap. Gaps smaller than a fraction of ATR are ignored. Each gap is drawn as a box that extends right until price mitigates it (trades back into it to t
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Unfilled gaps in the trend's direction act as pullback zones (price often reacts at the gap or its midpoint). Gaps that fill quickly against the trend are weak. 0.25 ATR minimum size keeps only meaningful gaps on crypto; "Midpoint" mitigation is a common compromise. Concept: Price imbalance / gap theory; "fair value gap" term from modern price-action education (ICT). Three-bar definition only.
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Back-tests and forward tests are simulations; past results do not predict future ones. Nothing here is financial advice. Trading carries a high risk of loss.