An FVG is a price imbalance that occurs when the market moves aggressively in one direction, leaving a gap between consecutive candles. This gap represents an area where liquidity was not fully exchanged, and price often revisits it later to “fill” the imbalance.

For example:

• In a bullish move, if Candle 1 closes and Candle 3 opens far above Candle 1’s high, leaving Candle 2’s low untested, that gap is an FVG.
• Traders expect price to retrace into this gap before continuing the trend.