Fair value gap strategy

The Fair Value Gap (FVG) strategy is a trading strategy used to identify market imbalances and inefficiencies. It is based on the idea that strong buying pressure can create a gap in the market, which can be exploited by traders. Here's how the FVG strategy works:

1. Identifying Fair Value Gaps: The first step in the FVG strategy is to identify potential fair value gaps in the market. This can be done by analyzing price movements and identifying patterns that suggest a gap is forming.

2. Entering Trades: Once a fair value gap has been identified, traders can enter trades to take advantage of the imbalance. This may involve buying when the price is rising rapidly or selling when the price is falling rapidly.

3. Managing Risks: As with any trading strategy, managing risks is crucial. Traders should be aware of the potential for losses and should use appropriate risk management techniques, such as setting stop-loss orders.

It's important to note that the FVG strategy requires careful analysis of market conditions and price movements. Traders should also be aware of the risks involved and should use appropriate risk management techniques.