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Do Fair Value Gaps Work Because of Imbalance or Stop Placement?

Earl Christian

Imbalance traders believe algorithms are programmed to fill price inefficiency before moving forward. Contrarians argue that the gap represents a void of resting orders, making it effortless for market makers to push price back through that zone to trigger stop losses. Is a Fair Value Gap a target for rebalancing or a trap for retail stops?

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  • Earl ChristianOP

    When price returns to fill an imbalance gap, is it returning to rebalance institutional liquidity or simply hunting the stops of traders who entered during the initial momentum move?

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