Displacement creates the imbalance

Fair Value Gaps

What displacement looks like

Displacement means price traveling further and faster than normal, usually candles with little to no overlapping wicks. That aggression is what smart money uses to signal genuine intent, not just noise.

Orders overrunning the other side

When big orders hit the market all at once, the other side gets overrun and price skips levels instead of trading through them cleanly. That skipped territory is the fair value gap.

No displacement, no real gap

A choppy, overlapping candle sequence might leave a tiny technical gap, but it carries none of the weight of a true displacement-driven imbalance.