Full formBusiness & Corporate
FVGstands forFair Value Gap
Full Form of FVG
What is FVG?
Fair Value Gap (FVG) is a term used in stock market technical analysis to describe a price imbalance on a trading chart. It occurs when there is a sharp move in price, leaving a gap between the closing and opening prices that is not filled by subsequent trading activity. This gap indicates that the market was unable to efficiently price the asset, creating an area where the price is considered 'out of balance' and often acts as a magnet for future price action. In the Indian context, FVG is widely used by intraday traders and swing traders analyzing Nifty, Bank Nifty, or individual stock charts. It is a core concept in the 'Smart Money Concepts' (SMC) methodology, which is popular among retail traders in India. Traders look for FVGs to enter trades expecting the price to return and 'fill the gap' as part of institutional order flow. The concept is often taught in advanced technical analysis courses and is relevant for examinations like the NISM Series VIII (Equity Derivatives) or the SEBI Investor Certification. While not a regulatory term, FVG has become a buzzword in Indian trading communities and YouTube tutorials. It is distinct from a standard price gap, as FVG is identified using specific candlestick patterns and volume analysis. Understanding FVG helps traders anticipate reversals and continuations in volatile markets.
FVG का फुल फॉर्म
उचित मूल्य अंतर
Example
After the RBI policy announcement, the Nifty created an FVG between 24500 and 24550, and many traders waited for the price to retrace and fill that imbalance.
FVG — frequently asked questions
What is the full form of FVG?
FVG stands for Fair Value Gap, a concept in technical analysis indicating an area of price imbalance on a trading chart.
Is FVG used in Indian stock markets?
Yes, FVG is commonly used by Indian traders analyzing Nifty, Bank Nifty, and individual stocks, especially in intraday trading.
How do traders identify a Fair Value Gap?
Traders identify an FVG when there is a sharp candle with a gap in the overlapping wicks of adjacent candles, often confirmed by volume and order flow patterns.