r/FuturesFundamentals

A lot of people have heard of FVGs but either misuse them or skip them entirely. Here's a clean breakdown.
What is a fair value gap?
A fair value gap (FVG) is a 3-candle pattern where price moves so aggressively that it leaves a gap in the market structure — a zone where one side of the market was never properly tested. On a chart it shows up as:

• Candle 1 high doesn't overlap with Candle 3 low (bullish FVG)
• Candle 1 low doesn't overlap with Candle 3 high (bearish FVG) That gap is an inefficiency. Institutions don't like leaving inefficiencies unfilled.
• Why price comes back to them Smart money moves in large size. When they push price aggressively, they often need to revisit that zone to offload more of their position or rebalance orders that didn't fill. Retail traders see a pullback and think it's a reversal — it's usually just price returning to fill the inefficiency before continuing. How to trade them properly A few things that separate useful FVGs from noise:
• Higher timeframe first. An FVG on the daily or 4H carries more weight than a 1-minute gap. Always know what the HTF narrative is before hunting entries on lower timeframes.
• Confluence matters. An FVG sitting inside a premium/discount zone, at a key level, or overlapping an OB is a much higher probability setup than a standalone gap.
• Not every FVG gets filled. In a strong trending move, price can blow through multiple FVGs and fill them later. Don't force a trade just because a gap exists.
• Entry refinement. Drop to a lower timeframe when price taps the FVG. You're looking for a shift in market structure on the entry TF to confirm the reaction — not just blindly placing a limit at the gap edge.
• Invalidation. If price closes through the FVG entirely rather than reacting at it, the setup is dead. Cut it.
• Common mistakes
• Trading FVGs against the higher timeframe trend
• Entering on the first tap without waiting for confirmation
• Ignoring the quality of the gap (small choppy gaps vs. strong displacement gaps are not equal)
• Setting your stop too tight inside the gap instead of outside the full zone Summary FVGs are one of the cleaner ICT concepts when used properly. They're not magic — they work best as a precision entry tool after you've already identified the directional bias and key levels on higher timeframes. If you want a quick reference for this and a few other key setups, I put together a free strategy cheat sheet — link in my profile. No email, no signup, just download it. What's your experience with FVGs? Any edge cases or confluences you've found that improve the probability?