FVG vs Imbalance
Michael Whitman
·
Trading since 2017, full-time since 2020
·
Published 2026-09-08
·
Updated
·
Reviewed
Fair value gaps and imbalances are the same thing under this site's definitions: three candles where the first and third wicks leave a band untouched. The word imbalance is also used more loosely, for two candles whose bodies do not overlap while their wicks do. That looser reading is the only real difference.
There is no difference to find between a fair value gap and an imbalance as this site defines them. Both pages describe the same three candles and the same untouched band between the first and third wicks. What does differ is how the word imbalance gets used elsewhere, and that looser usage can be counted.
What each one is
The strict version is the fair value gap: three candles, outer wicks apart. Bullish means the first candle’s high stays under the third candle’s low. The fair value gap page states it, and how to find a fair value gap walks through it.
An imbalance, on this site, is the same measurement. The imbalance page defines it as the distance separating the wick of candle one from the wick of candle three. Same candles, same band.
The looser usage is a body gap. Some traders use the word for two neighboring candles whose bodies leave a space. The CandelaCharts Volume Imbalance script on TradingView (published December 2024, read 5 October 2026) describes a volume imbalance as a gap between the bodies of two consecutive candles whose wicks might intersect. That band is real, but it is not the three-candle gap.
Where they differ
Only in the loose reading. Under the strict definitions there is nothing to compare; the rule is identical. The rest of this section is about the body-gap usage.
How many candles. The strict gap needs three; the body gap needs two.
What is measured. The strict gap uses wicks, so price never traded in the band during those candles. The body gap uses opens and closes, so price did trade inside it, on a wick.
How wide each is. On Apple the body gaps were a median 0.301% of price, the three-candle gaps 0.827%.
Where body gaps come from on a daily chart. An open away from the prior close, with a wick that reaches back across it.
Which one to use: FVG or Imbalance?
Use either name when you mean the three-candle wick gap, and say which rule you mean so nobody has to guess.
Use “body gap” or “volume imbalance” for the two-candle version, rather than imbalance on its own, because otherwise the same word covers two different bands.
When you keep a record, keep the two versions apart. They behaved differently on Apple, so mixing them blurs both records.
What the loose reading adds on Apple
The test. Apple daily bars from 4 January 2010 to 2 October 2026. A fair value gap uses the strict three-candle rule. A body gap is two consecutive candles whose bodies do not overlap while their wicks do; this is the site’s own version of the test, which ignores candle color. Two-candle gaps where even the wicks leave a space, 501 ordinary price gaps, are counted separately and are neither.
1,449 fair value gaps and 1,382 body gaps, about 86.5 and 82.5 a year. 828 of the body gaps (59.91%) sat inside the three candles of a fair value gap; the other 554 were bands the strict rule never drew.
The body gaps were revisited sooner. 1,062 of 1,380 (76.96%) were traded back into within five sessions, against 982 of 1,449 fair value gaps (67.77%), a difference far beyond chance (Fisher exact test, p below 0.001). Narrower bands are easier to reach.
A body gap from the first days of October 2026
The candles. On 1 October 2026 Apple opened at $330.00 and closed at $330.32, with a high of $332.48. On 2 October it opened at $333.26, dipped to $330.61 and closed at $333.69.
The reading. The bodies left a space from $330.32 to $333.26, but the 2 October low of $330.61 sat below the 1 October high, so the wicks overlapped. Under the loose usage that is an imbalance; under this site’s rule there is no gap, since no three-candle set through 2 October has non-overlapping wicks.
The point. Two traders using the same word would mark one chart differently, and neither is wrong until they say which rule they used.
The original data
The sample. 4,213 Apple daily bars from Yahoo Finance (split-adjusted), 4 January 2010 to 2 October 2026, 16.74 years. The start is 2010 so that early split-adjusted prices, which are tiny fractions of a dollar, do not create false ties.
The headline figure. The two-candle body reading found 1,382 bands; 554 of them (40.09%) fell outside every three-candle gap.
The file. Every body gap and every fair value gap, with both candles’ open, high, low and close, is in the Apple gap file.
What is left out. Volume is not used, despite the name volume imbalance. Nothing measures what price did after reaching either band.
When it fails
The failure is switching rules without noticing. A trader learns the three-candle gap, hears imbalance used for body gaps, and starts marking both under one word. The chart fills with bands, about twice as many as the strict rule draws, and whichever one price reacts to becomes the example. The rule did not change on paper; the record did.
The second failure is arguing about the names. The useful question is which rule.
A third is calling a two-bar price gap an imbalance. It is an ordinary gap.
A fourth is reading the word volume as a measurement. No volume enters the rule.
And a fifth is skipping the definition when you share a chart. The other reader may use the other one.
Related
Fair value gap has the strict three-candle rule. Imbalance describes the same gap under its other name. And order block is the candle-based area these bands are usually drawn beside.
Before you argue about which term is right, ask which rule the other person is using. If they mean three candles and wicks, it is the same gap. If they mean bodies on two candles, it is a different, smaller band, and it needs its own record.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.