What is a Fair Value Gap (FVG)?

A Fair Value Gap is a three-candle pattern where aggressive price movement creates an imbalance zone. Price often returns to fill this gap before continuing in the original direction.

How do I identify an Order Block?

An Order Block is the last opposing candle before an impulsive move. For a bullish OB, look for the last red candle before a strong move up. The zone from low to high becomes support.

Do FVGs always get filled?

No, not every FVG fills. In strong trending markets, FVGs may remain unfilled as momentum continues. Filled FVGs on higher timeframes are more reliable.

What timeframe works best for SMC?

Higher timeframes (daily, weekly) produce more significant SMC zones. Use higher timeframes for zone identification and lower timeframes for entry timing.

Smart Money Concepts (SMC): FVG & Order Blocks

Key Takeaways

SMC analyzes institutional footprints through Fair Value Gaps and Order Blocks
FVGs are imbalance zones where price moved too fast - often revisited later
Order Blocks mark the last opposing candle before an impulsive move
Higher timeframe SMC zones are more reliable than lower timeframe ones

What are Smart Money Concepts?

Smart Money Concepts (SMC) is a trading methodology based on the idea that institutional traders leave footprints in price action. By identifying these patterns, retail traders can align their trades with institutional order flow.

EmmaScan detects two key SMC patterns: Fair Value Gaps (FVG) andOrder Blocks (OB).

Multi-Timeframe Analysis

For best results, identify SMC zones on higher timeframes (daily, weekly) and use lower timeframes (1H, 15min) for precise entries. This multi-timeframe approach significantly improves accuracy.

Fair Value Gaps (FVG / Imbalance)

What is an FVG?

A Fair Value Gap is a three-candle pattern where the middle candle moves so aggressively that it creates a "gap" between the wicks of the candles before and after it.

Bullish FVG

Occurs when there's aggressive buying:

Middle candle is bullish (close > open)
Current candle's low > two candles ago's high
Creates a gap/imbalance zone price may return to fill

Bullish FVG Zone

FVG Zone: High[t-2] to Low[t]

Bearish FVG

Occurs when there's aggressive selling:

Middle candle is bearish (close < open)
Current candle's high < two candles ago's low

How to Trade FVGs

Wait for retest: Price often returns to fill the FVG zone
Entry zone: The FVG area acts as support (bullish) or resistance (bearish)
Stop loss: Place stops beyond the opposite side of the FVG

Order Blocks (OB)

What is an Order Block?

An Order Block is the last opposing candle before an impulsive move. It's thought to represent the final accumulation or distribution by institutions before the big move.

Bullish Order Block

The last bearish (red) candle before an impulsive bullish move:

Look for a red candle followed by strong green candles
The impulsive move breaks above recent highs
The OB zone (low to high of that red candle) becomes support

Impulsive Move Definition

Close[t] > High[t-1] AND Close[t] > High[t-2]

Bearish Order Block

The last bullish (green) candle before an impulsive bearish move. This zone becomes resistance if price returns.

How to Trade Order Blocks

Mark the zone: OB spans from low to high of the last opposing candle
Wait for return: Price often returns to the OB before continuing
Confirmation: Look for rejection (wicks, small body candles) in the zone

Overuse Warning

SMC patterns appear frequently on charts. Avoid trading every FVG or OB you see. Focus on:

Higher timeframe zones (daily, weekly)
Zones with confluence (near key support/resistance)
Fresh, untested zones (first touch has highest probability)

Key Parameters

Parameter	Default	Description
OB Lookback	5 bars	How far back to search for the last opposing candle

Tips for SMC Trading

Higher timeframes: FVGs and OBs on daily/weekly charts are more significant
Confluence: SMC zones that align with traditional S/R are stronger
Not every FVG fills: Strong trends may leave unfilled gaps
Multiple touches: Zones lose strength after repeated tests

Confluence Trading

The best SMC trades occur when an FVG or OB aligns with traditional technical analysis: moving average support, round numbers, or previous swing highs/lows. This confluence significantly increases the probability of a successful trade.