Fair value gaps and order blocks
Two boxes drawn from bars — only as honest as the definition written before them.
Mark a fair value gap and an order block from the bars alone, using a definition precise enough that someone else would draw the same box: which three bars, which candle, body or wick, how large the move has to be. Explain what each box records, why price returning to one is neither confirmation nor failure, and why a definition redrawn after the fact cannot be checked.
5 chapters · 6 quiz questions · 10 terms · included with a plan
Otus, on this module
These two are the most drawn boxes in the vocabulary, and the least defined. Ask three people to mark the order block on one chart and you will get four boxes. That is not a reason to throw the words away. It is a reason to write the rule down first — and then to live with what it draws.
The chapters
Each module ends with you doing what it taught — a written answer Otus reads, and a quiz.
- 01 · Read
The fair value gap: three bars and a band
What the gap records, how to draw it the same way twice, and what a return means.
- 02 · Watch
Watch: Fair Value Gap
One minute, then the step ticks itself.
- 03 · Read
The order block: which candle, and which part of it
The last opposite bar before a large move — and the choices that decide the box.
- 04 · Watch
Watch: The Order Block
One minute, then the step ticks itself.
- 05 · Write
Write the rule first
One definition, precise enough to hand to someone else. Otus reads it.
- 06 · Quiz
Six questions
A wrong answer still pays. It costs the combo, not the XP.
10 terms this module defines
The same definitions Otus uses in the lessons. All of them are in the trading glossary.
- Fair value gap
- In a rising move, the band between the first bar's high and the third bar's low of three consecutive bars, when the first is below the third. Prices only the middle bar traded. FVG for short.
- Three-bar rule
- The test for a fair value gap: compare the first bar's extreme with the third bar's opposite extreme. If they do not overlap, the band between them is the gap.
- Imbalance
- Another name for the band a fair value gap marks: prices crossed quickly in one bar with little two-way trade. A description of that bar, not a debt the market owes.
- Displacement
- A bar, or short run of bars, much larger than those around it — commonly at least 1.5 or 2 times the ATR. The size threshold both boxes need before they are checkable.
- Fill
- Price trading back through the whole of a fair value gap; a wick into it is only a touch. Any return is also called mitigation. A later, separate event: a fill does not confirm the gap, and no fill does not refute it.
- Order block
- In a rising move, the last falling bar — the last down candle — before a large rise; the mirror in a falling move. The same box older books call a demand or supply zone. A real place on the chart; the large orders the name implies are a guess.
- Body or wick
- Whether an order block is drawn over its bar's full range or its body only. The choice can halve the box, and it must be made before the chart is read, not after.
- When a box stops counting
- The rule for retiring a gap or block — after the first return, after a close through it, or never. Left unstated, one box can be declared respected any number of times.
- Redrawn box
- A gap or block whose edges were chosen after price reached it. It can be made to hold or fail at will, so it records nothing.
- Drawn from bars
- A term defined only by the prices of finished bars, so anyone can check it. Gaps and blocks can be; stops and intent cannot.
Finishing it pays 150 XP and 3 keys on the game board, on top of what each chapter earns. XP measures what you learned — never what you earned. How levels work.
Education only. Nothing here is a recommendation to buy or sell anything; the school teaches reading charts, never predictions.
Start with lesson one.
The first modules, Otus as your tutor and the game board are free. No card needed.