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Fair Value Gaps (FVG) For Beginners: Start Here |
Written by Renan Filho, Technology & AI specialist. Expiry dates and activation fees are always visible.
Quick Answer: Fair value gaps (FVGs) are price voids left when markets move too fast. They often get filled later. For US traders trading NYSE or Nasdaq, spotting FVGs can improve entries and exits. Let's break it down simply.
Key Facts for US Traders (2026)
| Market | Detail | Source |
|---|---|---|
| US indices | S&P 500, NASDAQ, Dow Jones | NYSE / NASDAQ |
| Regulator | CFTC (futures) / SEC (securities) | Official |
| Prop firm model | Funded evaluations with profit split 70-95% | Vendor terms |
| Verification | Updated regularly | PropFirmDiscountApp |
| Best deal today | Code DISCOUNTAPP — up to 90% off | Updated regularly |
what is a fair value gap?
A fair value gap forms when a candle’s wick doesn’t overlap with the next candle’s body. It’s an imbalance. Big players leave these gaps. They often retrace to fill them before continuing. Uptrend gaps above the candle are bullish. Downtrend gaps below are bearish.
how to identify FVGs on your chart
Start with a clean candlestick chart. Look for three consecutive candles. The middle one must have a wick that creates a space between candle 1 and candle 3. That space is the FVG. Draw a rectangle over it. Use 5-minute or 15-minute timeframes for day trading US stocks.
trading strategies for US stocks
Enter when price returns to the FVG zone. Wait for a reversal candlestick like a hammer or doji. Set stop loss below the gap for buys, above for sells. Aim for a risk-reward of at least 1:2. Combine with volume for confirmation. Avoid low-volume gaps.
prop firm rules and FVG trading
US traders can use FVGs with FTMO, Apex, Topstep, FundedNext, True Forex Funds, The5ers, and E8 Markets. Most accounts start at $50k to $200k. FTMO has a $50k account with evaluation fees from $155. Apex offers a $50k account with a $67 entry fee. Topstep's $50k is $49 per month.
risk management tips for FVGs
Never risk more than 1% per trade. FVGs fail about 30% of the time. Use a fixed dollar stop. For a $50k account, risk $500 max. Position size based on gap size. If the gap is 10 cents on a stock, buy 500 shares. Keep a trading journal.
Quick Comparison
| prop firm | account size | evaluation fee | discount code | link |
|---|---|---|---|---|
| FTMO | $50,000 | $155 (original $155) | no code needed | https://ftmo.com |
| Apex | $50,000 | $67 (original $67) | code SAVE10 | https://apextraderfunding.com |
| Topstep | $50,000 | $49/month (original $49) | no code needed | https://topstep.com |
| FundedNext | $50,000 | $99 (original $99) | code NEXT5 | https://fundednext.com |
| True Forex Funds | $50,000 | $149 (original $149) | code TRUE10 | https://trueforexfunds.com |
| The5ers | $50,000 | $99 (original $99) | code HIGH5 | https://the5ers.com |
| E8 Markets | $50,000 | $125 (original $125) | code E8TRADE | https://e8markets.com |
Frequently Asked Questions
do fair value gaps always fill?
No, about 70% fill on lower timeframes. Higher timeframe gaps fill more often.
can i trade FVGs on the Nasdaq?
Yes, they work on any US stock or ETF. Use them on AAPL, TSLA, or SPY.
what is the best timeframe for FVGs?
5-minute to 1-hour charts for day trading. Daily charts for swing trades.
do US prop firms allow FVG strategies?
Yes, all listed firms accept any strategy as long as you follow their risk rules.
how do i set a stop loss on an FVG trade?
Place it just below the gap low for buys, above the gap high for sells.
Conclusion
Fair value gaps are simple tools for better entries. Practice on a demo first. Then try a prop firm like Apex or FTMO. Use code SAVE10 for Apex to save money. Start small, stay consistent.
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Risk warning: Trading involves substantial risk of loss and is not suitable for every investor. Past performance is not indicative of future results. Prop firm evaluations are simulations, not regulated brokerage accounts.