Fair value gap vs imbalance
Many educators use fair value gap and imbalance for the same three-candle pattern. Others draw a line between them. It depends on whose definition you are reading.
The short answer
In many explanations aimed at retail traders the two words describe the same thing: a stretch of price that a fast move crossed, marked by the wicks of the candles on either side. "Inefficiency" is used the same way.
Some sources keep a difference. A fair value gap is the specific three-candle shape. An imbalance is the wider idea that buying or selling was one-sided, and it can be shown by a run of candles in one direction. If a source does this, its examples are not interchangeable with ours.
Compared
| Term | How it is usually used | Difference to watch |
|---|---|---|
| Fair value gap | Three candles whose first and third wicks do not overlap | The rule is exact, so two people can mark the same gap |
| Imbalance | A one-sided move, often drawn as the same three-candle space | May mean a run of candles, not one shape |
| Inefficiency | Another name for the same space | Used loosely |
| Liquidity void | A stretch of price with little trading, possibly several candles long | Usually wider than one gap. See liquidity void |
| Price gap | Empty space between one candle's close and the next open, such as after a weekend | Can create a fair value gap, but is a different thing |
| Volume imbalance | Often a gap between candle bodies where the wicks still overlap | Not a fair value gap by the wick rule |
Where educators use these terms differently, this table gives the most common use and says so. It is not an agreed standard, because none exists.
Why the definition changes the chart
The same candles can show a small gap on wicks and a larger one on bodies. This site uses wicks, three candles, no minimum size, so every example here can be checked by anyone with the candles.