How is a classic fair value gap pattern drawn?

• A. The first candle: This candle appears with a relatively small body. The second candle: This candle creates the imbalance and has a significantly larger body compared to the first candle. The third candle: This candle usually has a smaller body and completes the fair value gap pattern.
• B. It is a single candle with a long wick.
• C. It is a two-candle pattern with equal bodies.
• D. It is a four-candle pattern with alternating colors.

Answer: (A)

A fair value gap pattern shows an imbalance created by a strong move, leaving a price gap between the first two candles. The sequence starts with a small-bodied candle, indicating modest price action. Then a second candle moves decisively in the main direction and has a much larger body, creating the imbalance and the visible gap. A third candle with a smaller body often follows, completing the pattern and sometimes filling the gap as price rebalances. This matches the described three-candle sequence: small body first, a larger, imbalancing second candle, and a smaller-bodied third candle.