A Fair Value Gap describes a specific three-candle pattern where price moved fast enough that a visible gap exists between the first and third candle's ranges, a zone where genuine two-sided trading essentially didn't happen because the move was too quick.
1. How to spot one
Look at three consecutive candles: if the high of the first candle sits below the low of the third candle (in an upward move), the space between them is the Fair Value Gap. It represents a stretch of price that got skipped over rather than traded through normally.
2. Why price tends to revisit these zones
Because the gap represents an area with limited actual trading activity, price often returns to it later to "fill in" that imbalance before continuing in its original direction, or sometimes reversing from it entirely. This tendency to be revisited is what makes the concept useful as a reference zone.
3. Using it as a reference, not a trigger
An FVG by itself isn't an entry signal, it's a zone worth watching for a reaction when price returns to it. Combining the gap with other confirmation, a candlestick rejection, alignment with the higher-timeframe trend, gives a more complete picture than reacting to the gap in isolation.