IMBALANCE PATTERN
Fair value gap
A three-candle price gap between the first and third ranges after a strong middle candle.
Rules visible before the outcome
- Bullish: first high is below third low; reverse for bearish
- Minimum gap is normalised by ATR or tick size
- The middle candle meets an impulse rule
02 / CONFIRMATION
When the idea becomes eligible
A return into the zone plus a defined response, or a continuation rule tested separately.
03 / INVALIDATION
What proves it wrong
Full traversal or close beyond the zone under the chosen definition.
The attractive mistake
Terminology can imply hidden order flow that candle data alone cannot verify.
Make it falsifiable
Measure fill probability, time to fill and post-touch return without discarding unfilled gaps.
1Freeze the geometry
2Timestamp eligibility
3Count every outcome
4Test unseen data