Which term describes a price range where fair value gaps may be found?

Which term describes a price range where fair value gaps may be found?

• A. Break of structure
• B. Liquidity sweep
• C. Equilibrium price
• D. Fair value gap

Answer: (D)

Gaps in traded value occur when price moves quickly from one level to another, leaving a void where no trades took place. This creates a price range on the chart that represents missing value, known as a fair value gap. Traders view these gaps as areas where fair value wasn’t exchanged and where price may return to fill the gap, often acting as potential support or resistance as the market rebalances. Other terms describe different ideas: a break of structure signals a change in the sequence of highs and lows, not specifically a gap in value; a liquidity sweep refers to a move that captures resting liquidity, not the presence of a price void; and equilibrium price is the theoretical point where supply and demand balance, not the existence of gaps. The term that names the very concept of a price range containing a fair value gap is the best fit.

Gaps in traded value occur when price moves quickly from one level to another, leaving a void where no trades took place. This creates a price range on the chart that represents missing value, known as a fair value gap. Traders view these gaps as areas where fair value wasn’t exchanged and where price may return to fill the gap, often acting as potential support or resistance as the market rebalances.

Other terms describe different ideas: a break of structure signals a change in the sequence of highs and lows, not specifically a gap in value; a liquidity sweep refers to a move that captures resting liquidity, not the presence of a price void; and equilibrium price is the theoretical point where supply and demand balance, not the existence of gaps. The term that names the very concept of a price range containing a fair value gap is the best fit.