guides fair value gap fvg imbalance quantitative definition and mt5 formula. Venasri protects the MT5 account with Equity Guard and position-size limits. Updated 2026-10-17 Verified Against Venasri MT5 Engine

Fair Value Gap (FVG / Price Imbalance) - Quantitative Formula & MT5 Implementation

Direct Technical Answer

A Fair Value Gap (FVG) is a three-candle imbalance where Candle 1 high and Candle 3 low do not overlap (bullish) or Candle 1 low and Candle 3 high do not overlap (bearish). The tradable pocket is the open gap in price.

Fair Value Gap (FVG) trading is not "buy every blank stripe." If H1 candles 1 and 3 still overlap by 0.20 gold, there is no gap, and painting a rectangle does not create one. Venasri measures the literal non-overlap in points, ties it to a BOS displacement, and only then allows an M15 retest. That is why many textbook gaps never appear in the zone list.

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Fair Value Gap (FVG / Price Imbalance): brass astrolabe, calipers, and golden abacus on a dark obsidian desk
Fair Value Gap (FVG / Price Imbalance)
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Measuring the non-overlap on gold and EURUSD

Bullish FVG height = Candle1.high - Candle3.low, valid only when Candle3.low > Candle1.high (no overlap). Example: C1 high 2,341.20, C2 displacement, C3 low 2,344.80. Gap = 3.60 points from 2,341.20 to 2,344.80. Equilibrium is 50% at 2,343.00. Bearish: valid when C3.high < C1.low. EURUSD H1: C1 low 1.08460, C3 high 1.08390, gap 7.0 pips. If C3 high is 1.08465, overlap is 0.5 pip and the FVG is rejected.

Minimum gap filter: 0.15x ATR(14) of that timeframe, so a 1.2-pip H1 EURUSD "gap" inside a 12-pip ATR does not clutter the book. Gold H1 ATR 18: minimum about 2.7 points.

Fill rules: 50% equilibrium versus full fill

Many books fade the first touch of 50%. Venasri scores inversion after a full fill through the opposite gap edge plus a CHoCH. Partial fills that only nick 20% of the gap remain valid. If NFP trades through the entire 3.60-point gold gap and closes beyond, the FVG is filled and deleted. Holding a limit in a filled gap is hoping, not executing.

ICT-style "inversion FVG" after a failed bullish gap becomes a short zone. The engine can invert rather than delete when the displacement BOS that created it is later violated on the same TF.

Stacking FVG with Order Block and Volume Profile

Related reading: Order Block guide and LVN guide.

Stops outside the gap, not inside the paint

SL belongs beyond the origin OB distal or beyond the FVG invalidation edge, not in the middle of the rectangle. A 3.60-point gold gap with a 16-point structural SL still sizes as $500 / (16 x 100) = 0.31 lots. Venasri Risk Management & Equity Guard plus 24/7 MT5 Bot Control attach that SL if you market into the gap from iOS. start free on Venasri before the next CPI so a 30-point news hole cannot land you naked in the imbalance.

start free on Venasri so fair value gap fvg imbalance is not a browser-only exercise: Venasri Risk Management & Equity Guard owns the flatten, Venasri Performance Analytics stores MAE and R, and 24/7 MT5 Bot Control is the 24 hour execution path on ZeroMQ or MetaAPI.

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Verified Answers

Frequently Asked Questions: Fair Value Gap (FVG / Price Imbalance) - Quantitative Formula & MT5 Implementation

How do I know if three candles actually form an FVG?

For a bullish gap, Candle 3 low must sit strictly above Candle 1 high. Any overlap, even 0.10 gold, means no FVG. Measure it; do not squint at a rectangle.

Should I trade every FVG on M15?

No. Venasri keeps displacement-linked H4/H1 gaps and uses M15 only as the trigger.

Is the entry at 50% of the gap or at the edge?

Either can be a limit, but execution still waits for M15 CHoCH or a rejection close. Blind 50% limits through NFP are a slippage lottery.

What happens after the gap is fully filled?

The zone is removed or inverted. You do not keep a stale long limit in a fully filled bullish FVG and call it a retest.

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