Fair Value Gaps: Imbalance & Why Price Rebalances
A three-candle pattern that reveals imbalance. Learn BISI and SIBI gaps and how price returns to fill them.
What A Fair Value Gap Is
A Fair Value Gap (FVG), or imbalance, is a price range created by an aggressive move where one side of the book was overwhelmed. It is a three-candle pattern.
Because the move was so fast, one price zone was not "fairly" traded — and price often returns to rebalance it.
How It Forms
Look at three consecutive candles. If candle 1's high is below candle 3's low (bullish), the gap in between is a bullish FVG. For a bearish FVG, candle 1's low is above candle 3's high.
BISI & SIBI
- BISI — Buy-side Imbalance, Sell-side Inefficiency (bullish gap).
- SIBI — Sell-side Imbalance, Buy-side Inefficiency (bearish gap).
In a bullish trend, price pulls back into a BISI to fill it, then continues up — a classic with-trend entry.
Using FVGs With Confluence
An FVG on its own is context, not a signal. Stack it with:
- An order block at the same area — a high-quality entry zone.
- A CHoCH confirming the shift.
- A sweep of liquidity just before the return.
Partial vs Full Fills
Price does not always fill an FVG completely. Sometimes it taps the edge and leaves, sometimes it fills and keeps going.
✅ Key Takeaways
- FVGs are 3-candle imbalances.
- BISI = bullish gap, SIBI = bearish gap.
- Price often returns to rebalance them.
- Best used with OB, CHoCH and liquidity sweeps.
⚠️ Common Mistakes
- Treating every gap as a guaranteed fill.
- Ignoring invalidation when price closes through.
- Using FVGs without any HTF bias.
🧠 Quick Quiz
Lock in the lesson — answer, then check your score.
Keep The Momentum.
Finish the track, take the quizzes, and come back to these notes before your next session.