What is FVG full form in Banking?
The FVG full form in Banking is Fair Value Gap. The Fair Value Gap, or FVG, is a popular tool for price action traders to identify market inefficiencies or imbalances. Other traders may even refer to them as inefficiencies. These imbalances occur when there is strong purchasing or selling pressure, resulting in a large upward or downward movement, leaving an imbalance in the market.
Significance of FVG in Banking:
The significance of fair value gap in banking is that the market will eventually return to these inefficiencies before continuing in the same impulsive route. FVGs are crucial because traders can gain an advantage in the market. Price action traders can leverage these imbalances to enter or exit the market.
Relationship between fair value gap and liquidity voids:
In fact, fair value gaps and liquidity voids are virtually identical; a fair value gap is essentially a shorter-term liquidity void. Both suggest a severe imbalance in supply and demand. At the heart of both phenomena is a situation in which one greatly dominates the other, resulting in large market fluctuations with little consolidation. Scale and timeframe are frequently the deciding factors.
