---
title: 'How to Choose the Right Fair Value Gap'
source: 'https://youtube.com/watch?v=S32tFpz1zns'
video_id: 'S32tFpz1zns'
date: 2026-08-19
duration_sec: 83
channel: 'TradingLab'
---

# How to Choose the Right Fair Value Gap

> Source: [How to Choose the Right Fair Value Gap](https://youtube.com/watch?v=S32tFpz1zns)

## Summary

This video explains how to select the strongest Fair Value Gap (FVG) among multiple options by analyzing price reaction and using a 50% mark rule. It demonstrates a practical method to filter out weak gaps and identify the one most likely to hold, using a one-hour chart example.

### Key Points

- **Identifying Multiple Gaps** [00:01] — The video presents a scenario with four fair value gaps and poses the question of how to determine which one is the strongest.
- **First Gap Rejected** [00:14] — Price comes down to the first gap and instantly breaks through it, closing below. This gap is immediately removed from consideration.
- **Second Gap Rejected by 50% Rule** [00:27] — Price closes within the second gap, but the rule is: if price closes below the 50% mark of the gap, it is ignored. This gap is also removed.
- **Third Gap Shows Strong Rejection** [00:41] — Price closes exactly at the 50% mark of the third gap, then prints a rejection candle where price breaks the previous candle but holds above the 50% mark. This is a powerful sign.
- **Higher Timeframe Confluence** [00:54] — On the one-hour chart, these four gaps would appear as one big fair value gap on the daily timeframe. Price rejected at the 50% mark of that daily gap, adding confluence.
- **Conclusion: Third Gap Holds** [01:08] — With multiple confluence factors, the third gap is deemed the likely one to follow, and price moves up perfectly from there.

### Conclusion

The key takeaway is to filter fair value gaps by price reaction and the 50% mark rule, and to seek confluence from higher timeframes to identify the strongest gap.

## Transcript

gaps. But the question is, how do we know which one is the strongest? We have gap one, two, three, and four. The main thing you need to focus on is how price reacts to the gap. Here price comes down to the first gap and instantly breaks
right through it and closes below it. So now we can instantly remove it from our selection. Next price comes down to fair value gap number two. But this time it closed within the gap, which is good. But I like to have a rule. If it closes
below the 50% mark of the gap, I ignore it. So we remove that from our selection value gap number three. And when it does this, it does something extremely interesting. It closes at the 50% mark.
But not only that, it prints a rejection candle directly after, where price breaks the previous candle, but yet still holds the position, all while staying above the 50% mark. And here's a secret trick. This setup is on the
one-hour time frame, which means if we were on the daily time four of these fair value gaps would just be one big fair value gap. And what's interesting, price rejected right at the 50% mark on that daily fair value gap,
which is another very powerful sign. Now we have a lot of confluence that this gap will hold. It can assume the third gap is likely the one we want to follow. And look what happens, price perfectly moves up from here.