Imbalance Forex คือ: Price gaps and chart reading techniques for traders

Understanding the Basic Problem in Forex Trading

When you start trading Forex, you’ll encounter a tricky situation: not being able to tell exactly where to enter or exit a trade. Prices can spike or drop sharply, mostly caused by large-volume trading within a short period. This same problem led to the discovery of the FVG technique, which can help address it.

What is Fair Value Gap (FVG) : Basic Meaning

Price gap or called Fair Value Gap is a phenomenon that occurs on the Forex chart when prices move rapidly, skipping over a certain price range without any trading activity in that period, often during market closures or low liquidity conditions.

What makes FVG special is how it works. Most analysts believe these gaps act as magnets that attract prices. Prices tend to return to fill these gaps in the future because the market seeks to create balance.

Components of Imbalance Forex: Key Points to Know

Imbalance forex is the first signal indicating that an FVG is about to occur. A price gap consists of three candles moving in the same direction.

First candle: Defines the start point of the movement.

Second candle: This is the Imbalance – the point where the price changes direction or pauses temporarily. Most important.

Third candle: Defines the end point of the gap.

This imbalance occurs because many traders place orders in the same direction, causing prices to surge past certain levels without resistance. This is what is called imbalance – a market imbalance that will need to be corrected later.

When Does FVG Forex Occur

Sudden news releases

Unexpected news causes the market sentiment to change instantly. Many traders jump in to buy or sell simultaneously. Prices spike up or down rapidly, often linked to key economic data like interest rate changes or unemployment figures.

Institutional investor trading

When large banks or hedge funds buy or sell huge amounts at once, they have enough capital to push prices across levels quickly before the general market reacts.

During market open or close

Low liquidity during these times allows just a few orders to push prices much further.

Weekend gaps

Between Friday market close and Monday open, a lot of news accumulates. Prices may open at levels different from the previous close.

Types of FVG You Need to Know

First type: Bearish FVG (Downward Gap)

Structure consists of three consecutive red candles. The second candle is the imbalance, with a strong downward movement.

Chart reading points:

• Lowest point of the first candle = top of the FVG
• Second candle = price change
• Highest point of the third candle = bottom of the FVG

Interpretation: When the price retraces upward to this FVG, it will face more resistance, increasing the chance to sell.

Second type: Bullish FVG (Upward Gap)

Structure consists of three green candles in a row. The second candle is the imbalance, with a strong upward movement.

Chart reading points:

• Highest point of the first candle = bottom of the FVG
• Second candle = price change
• Lowest point of the third candle = top of the FVG

Interpretation: When the price retraces downward to this FVG, it will receive more support, increasing the chance to buy.

Advantages of FVG

Increased profit opportunities

Since prices tend to return to fill gaps, traders can predict movements to a certain extent.

Works on all timeframes

Whether you look at minute, hourly, or daily charts, you can always find FVGs. This flexibility makes the technique suitable for many types of traders.

Easy to learn and apply

The concept of FVG is simple. Even beginners can understand and use it quickly.

Applicable to various markets

Whether Forex, stocks, commodities, or crypto, this technique can be widely applied.

Clear profit targets

Entry and exit points based on gaps are often clear, making trade management more organized.

Limitations of Using FVG

Not a perfect signal

Prices do not always return to fill FVGs. Sometimes gaps are left unfilled because the market avoids them.

Requires other tools

Relying solely on FVG is risky. Combining it with other indicators like Moving Average or RSI is more important.

Same risks as other techniques

Prices can move against your position; the market does not read textbooks.

How to Use FVG Forex for Trading: 3 Key Steps

Step 1: Determine the trend direction

Before doing anything, you need to know where the market is heading.

Uptrend: Prices create higher lows and higher highs – look for upward gaps and prepare to buy.

Downtrend: Prices create lower highs and lower lows – look for downward gaps and prepare to sell.

Use higher timeframes, such as 4-hour, daily, or weekly charts, to identify the main trend and reduce false signals.

Step 2: Identify support and resistance at key levels

After knowing the trend, find levels where prices are likely to pause.

In an uptrend: Support levels are where buyers are interested and may push prices higher.

In a downtrend: Resistance levels are where sellers are interested and may push prices lower.

When an FVG aligns with these levels, the probability of a successful trade increases.

Step 3: Set stop-loss and profit targets

This step involves recording your money and data.

If you buy: Place stop loss below support levels to protect against market reversal.

If you sell: Place stop loss above resistance levels.

Profit target: Set at the next resistance/support in your direction, where the price might turn.

Additional Tips for Trading FVG

Use multiple indicators

Don’t rely solely on FVG. Incorporate Moving Averages, Bollinger Bands, or Stochastic. When multiple indicators confirm the same signal, your confidence increases.

Always use stop-loss

Stop-loss points are your protection. If the market moves against you, closing your position ensures you still have capital for the next trade.

Wait for confirmation

Before entering on an FVG, wait for the price to show signs of genuinely filling the gap. Check the next candles for momentum.

Time your entry

Timing is crucial. You might wait until the price approaches the FVG area before entering, rather than jumping in at the start of the gap.

Focus on liquidity

Pay attention to the previous day’s highs and lows. If an FVG overlaps with these points, liquidity is high, increasing the chances of a bounce or a price spike.

Summary

Fair Value Gap is a useful analytical tool for both novice and experienced Forex traders. Understanding that imbalance forex is a key component in identifying FVG helps you get better entry points.

However, FVG is not a magic cure-all. Use it alongside other analysis methods and manage your risks carefully. With practice and patience, you will see how the FVG technique can enhance your trading performance.