Fair Value Gaps are an essential concept for price action traders and refer to instances where buying and selling are unbalanced. They are typically identified as a three-candle sequence, with the middle candle being the largest, and the two neighboring candles having wicks that do not fully overlap the middle one. These imbalances in the market can present opportunities for traders to take advantage of, by recognizing the gap and making the correct trade. As a result, Fair Value Gaps are an essential concept for price action traders to be aware of and understand.
The Fair Value Gap Indicator
The Fair Value Gap Indicator is a useful tool on the TrendSpider platform which can be added to any chart inside the crypto sphere or in trading in general. This indicator will highlight all Fair Value Gaps on the chart with blue horizontal shaded areas, which can be seen in the example image. This indicator can be easily added to any chart by selecting it within the indicators button. The Fair Value Gap Indicator is a great tool to help traders identify trends and potential opportunities in the market.