Fair value gap
A fair value gap is three candles where the middle one runs so far that the wick of the first and the wick of the third never meet, and people treat that empty band as a place price may come back to. Michael J. Huddleston teaches it inside ICT, Inner Circle Trader. The timeframe and the entry aren't one rule, and Backtoast hasn't run one.
| Strategy | Trades | A year | Test |
|---|---|---|---|
| Fair value gap | – | – | Not run |
Backtoast
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The three candles
On a bullish gap the third candle's low sits above the first candle's high, and the middle candle is the one that traveled through the empty band. A bearish gap is the mirror, with the third candle's high under the first candle's low. Some write-ups mark the band from the wicks and some mark it from the bodies, and what you do when price comes back isn't one rule.
Order block and ICT
The same lessons call the last opposing candle an order block, and both pieces sit inside ICT trading strategy.
Not run.
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