Bearish Fair Value Gap: Rules, Examples and Practice
Apply the opposite geometry without mixing the boundaries.
Technical terms explained
Bearish FVG
The downward version of our three-candle gap rule: third high < first low.
Fair Value Gap
Look at three candles in order. When the first and third candle price ranges do not overlap, the price band between them is called a Fair Value Gap in ICT/SMC vocabulary. Our rule uses the full wick ranges and requires a positive-width band.
Bullish and bearish
Directional descriptions: bullish refers to a rising-price interpretation, bearish to a falling-price interpretation.
A bearish FVG has the third high strictly below the first low. The lower boundary is the third high; the upper boundary is the first low. Always order the prices from low to high when recording a zone. A downward move can contain no gap at all if the outside wicks overlap.
Our operational rule
Bearish interval: third high to first low, with third high < first low.
Worked example
First low 1.09040 and third high 1.09015 define 1.09015–1.09040.
Counterexample
A red middle candle is insufficient when the third high overlaps the first low.
Watch for this mistake
Reusing bullish high/low formulas in a falling sequence.
Charts are synthetic. These classification rules are not evidence of profitability.
Source and conventions
Lab operational definitions · version 1
Original exercise conventions: strict outside-wick FVG geometry; two completed neighbours on each side for swings; completed close through declared references; same-candle cross-and-return for a sweep. These are educational classification rules, not demonstrated trading edges.