Order blocks and fair value gaps are two of the most-discussed SMC tools. Understood plainly, they're specific, chart-based ways of marking areas price may revisit — useful when treated as zones, not guarantees.
Order blocks
An order block is typically the last opposing candle before a strong move — the idea being that significant orders originated there. When price returns to that area, traders watch for a reaction. In practice it's a refined supply/demand zone with a specific definition.
Fair value gaps (FVG)
A fair value gap is an imbalance — a three-candle pattern where price moved so fast it left a 'gap' with little trading. The theory is that price often returns to 'fill' this inefficiency. Like all such tools, it's a tendency, not a rule, and many gaps go unfilled.
Keeping perspective
Both are useful for marking levels of interest and refining entries, especially when they line up with structure and liquidity (confluence). But they're inference from a chart, not certainty. Trade them with confirmation and stops; don't assume an order block must hold or a gap must fill.
Key takeaways
- An order block is the last opposing candle before a strong move (a refined zone).
- A fair value gap is a fast-move imbalance price may — but won't always — fill.
- Use both as confluence with structure; confirm and use stops, never assume.