Direct answer
In forex, FVG most often stands for “fair value gap.” It refers to a price area that is seen on a chart when price moves quickly in one direction and leaves a visible gap/imbalance between consecutive candles (or between relevant swing levels). The term is used as a market-structure concept, not as a single universally standardized rule.
Explanation: what FVG means and how it works
A “gap” in trading usually means there is a clear separation between price levels. In liquid markets like FX, true exchange “gaps” may not always appear the same way as in stock markets, so the “gap” in FVG is often an interpretation of candle-to-candle relationships on a selected timeframe.
Common idea behind “fair value”:
- After a strong push, the market may briefly be out of balance.
- Traders then watch whether price later returns toward that imbalance area.
How FVG is commonly marked (conceptually):
- Choose a timeframe (for example, a higher timeframe used for structure).
- Look for a fast move that creates an “empty” zone between candles.
- Identify a price range that represents the imbalance.
- Treat that range as an area of interest if price later trades back into it.
Important: the exact identification method can vary. Some definitions focus on specific candle relationships (for instance, “three-candle” patterns), while others use an “imbalance” between high/low levels. Because of this, FVG can be defined differently by different charting communities.
Example checks and material assumptions
Here are practical, verifiable ways to think about FVG without assuming future outcomes:
- Chart-structure check: Does the marked zone come from candle relationships visible on your chart timeframe?
- Consistency check: If you apply a second person’s FVG rule using the same chart data, do you mark a similar area?
- No-goal check: Notice that the concept describes a past feature (the imbalance), not a guaranteed result.
Material assumptions and limitations you should keep in mind:
- Your ability to “see” FVG depends on timeframe and data source.
- Different traders may mark slightly different ranges from the same sequence.
- Even when price revisits an FVG area, the market can respond in multiple ways.
Limitations and risks (what not to assume)
- Not universal: There is no single, globally fixed definition of FVG in forex. The meaning relies on the rule set used to mark it.
- Subjective marking: Two people can mark different zones because the criteria can differ.
- No certainty: FVG is a concept about chart structure, not a prediction engine. Future price behavior is uncertain.
- Verification needed: If you want to rely on the idea in your own work, verify it against historical examples using a consistent method—without assuming outcomes in advance.