Fair Value Gap (FVG) – retest

ICT · Timeframe: H1 / M15 / M5 · Sessions: London and NY killzones

A three-candle inefficiency gap acts as a magnet and as an entry zone in the direction of the displacement.

How it works

An FVG (or imbalance) appears when, in a three-candle sequence, the low of candle 3 is above the high of candle 1 (bullish), leaving a range where only aggressive buying took place. Price tends to come back to 'rebalance' that gap. If the FVG comes from displacement in the direction of the trend, the retest of the gap is a continuation entry. The 'consequent encroachment' (50% of the FVG) is the key level: if price closes beyond it, the FVG loses validity.

Step-by-step rules

1. Filter the trend (H1/H4 structure or EMA50 > EMA200).
2. Spot an FVG created by a displacement candle in the direction of the trend.
3. Place a limit order at the edge of the FVG (or at its 50%).
4. Stop: on the other side of the FVG.
5. Target: next liquidity pool or 2R.

How Marketalyx tests it

Detector: H1 FVG in the direction of the trend (H1 EMA50 vs EMA200), limit entry at the edge, stop on the other side of the gap, 2R target, valid for 24 candles.

See real cases on gold and forex →

Related strategies

Power of Three (PO3 / AMD) · Order Block (OB) · PDH/PDL liquidity sweep (Turtle Soup) · ICT Silver Bullet · ICT 2022 model (Sweep + MSS + FVG) · Optimal Trade Entry (OTE 62–79%) · Judas Swing · SMT Divergence

Educational content. No strategy guarantees profits and past performance does not guarantee future results.