I spent a lot of time studying the market, and one thing that has really made a difference in my trading is understanding how to leverage Fair Value Gaps. It's not magic, but rather recognizing when the market moves so quickly that it leaves an imbalance between supply and demand behind.

Basically, an FVG is created when the price makes an aggressive move in one direction, leaving a space where there was virtually no trading activity. It's as if the market skipped over a zone, and sooner or later, it will come back to fill that void. This is the fundamental concept of FVG trading.

To identify them, you need to learn how to read price action. Watch when a large candle moves in one direction, then the next one moves away, creating this unfilled gap. I always mark these spaces on the chart because they become critical areas where the price tends to return. This is especially useful in volatile markets like crypto and forex.

Why are they important? Simple: they act as magnets for the price. The market often returns to these zones to restore balance. They can serve as dynamic support or resistance, making them interesting entry points if you know how to use them.

When I do FVG trading, my number one rule is to wait for confirmation. I don't enter immediately when I spot a gap. I wait for the price to return to that zone and show reaction signals, maybe an reversal pattern or a break of an important level. Patience makes the difference between a profitable trade and a loss.

I always combine gaps with other tools. If an FVG aligns with a 50% Fibonacci retracement or a moving average, the setup becomes much more solid. I never rely on a single signal.

The trend direction is crucial. In an uptrend, I look for gaps that act as support. In a downtrend, those that act as resistance. This simple adjustment greatly increases the probability of success.

For entries, I enter when the price reacts to the gap zone. I place the stop loss just outside the gap to minimize risk. I set the take profit at a logical level, the next support/resistance zone or a measured move based on the size of the gap itself.

Risk management: never risk more than 1-2% of your capital on a single trade. This is a rule I never break, no matter how promising the setup seems.

What do I avoid? Overtrading gaps. Not every gap will lead to profits. I need to be selective and wait for high-probability setups. Market context also matters: in sideways or highly turbulent markets, gaps are less reliable.

The thing I’ve learned from years of FVG trading is that discipline beats everything. Combining gaps with a solid strategy, good money management, and patience gives you a real edge in the markets. Whether you're a beginner or already experienced, mastering this concept can truly make a difference in your performance.