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Fair Value Gap Fillthe thin patch a fast move leaves behind

Evidence: WeakIntermediateMarket structure · Imbalance

Three consecutive candles where the first bar's high sits below the third bar's low leave a band of prices that barely traded. Price moved through it too quickly for an auction to happen.

The claim is that price tends to come back and trade that band. There is something real underneath this — thinly traded regions are where the order book was empty, and they tend to get revisited — but the specific three-candle construction is trading-education vocabulary and has not been tested under that name.

The vocabulary on this page comes from trading education, not from research. Where it renames something with real support, the page says so. A name is not a finding.

Category
Market structure · Imbalance
Timeframe
M15 to H4
Suitable pairs
Majors · gold · indices
Session
Gaps formed in active sessions only — a thin patch in the Asian session is a spread artefact
Indicators / tools
The three-candle rule · ATR(14) for a minimum width filter

Valid setup

MS-08 · FAIR VALUE GAP FILL — VALID SETUP XAUUSD · M15 · candle 1's high sits below candle 3's low — the band between them barely traded LONG 4284.51 4309.48 4334.45 4359.41 4384.38 4409.35 4434.32 THE BAND — must be at least 0.5 × ATR(14) wide TP1 = 2R 1R TP1 = 2R, then the move's extreme ENTRY = close back out of the band STOP = the band's low − 0.3 × ATR(14) 1 2 3 4 4408.80 4352.00 4323.60 ① Candle 1 — its HIGH is the band's floor ② Candle 2 — the fast move through the middle ③ Candle 3 — its LOW is the band's ceiling ④ Price returns, enters the band and closes back out ⑤ One attempt only: a full fill ends the imbalance ⑥ Fifteen-bar time stop. Gaps can stay open forever

Exact rules

Entry

  • Identify the band: candle 1's high below candle 3's low, for a bullish gap. The band is between those two prices.
  • Width filter: the band must be at least 0.5 × ATR(14). Tiny gaps form constantly and mean nothing.
  • Trade it as a level, not as a certainty: wait for price to enter the band and close back out of it in the direction of the original move.
  • One attempt per gap. Once price has traded through the whole band, the imbalance is gone by definition.

Stop loss

  • Below the far edge of the band, minus 0.3 × ATR(14).
  • The band's own edges give a clean invalidation, which is the main practical benefit of the construction.
  • Risk 0.5%.

Take profit / exit

  • TP1 at 2R.
  • TP2 at the extreme of the move that created the gap.
  • Time stop at fifteen bars. An unfilled gap can stay unfilled indefinitely and waiting for it is not a plan.

Build Fair Value Gap Fill

Reading this page is free and always will be. Taking it is what costs — the complete MQL5 for the rules above, yours to keep, permanently. Five of them cost $10 and they never expire.

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More from Market structure

Break of Structure ContinuationBOS, then a higher lowChange of Character ReversalCHoCH, then a lower highLiquidity Sweep → Market Structure Shiftthe full sequence

Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.