Points of Interest (POI)/
Fair Value Gap (FVG)
TL;DR
A Fair Value Gap (FVG) is a 3-candle pattern demonstrating explosive momentum and a lack of liquidity at certain price levels. It reveals algorithmic displacement and acts as a powerful magnetic zone for future price mitigation.
How It Works
- 1
An FVG is formed over exactly three candles, usually during a rapid expansion (displacement).
- 2
In a Bearish FVG, there is a gap between the low of Candle 1 and the high of Candle 3.
- 3
In a Bullish FVG, the gap is between the high of Candle 1 and the low of Candle 3.
- 4
The gap represents an area where only one side of the market (buyers or sellers) participated, leaving an imbalance.
- 5
Price inherently gravitates back to these gaps to 'fill' them and rebalance the order book (Mitigation).
LiquidMind uses Fair Value Gaps as primary targets for take-profits and as structurally sound validation levels for entries. A POI entry (like an EQL sweep) is significantly higher probability if it has a clean FVG above it acting as a draw on liquidity. The AI engine continuously tracks unfilled FVGs on the 1H and 4H charts, aggressively downgrading the score of trades that attempt to initiate positions directly into a massive unmitigated gap.