FVG Behavior Rules

What are FVG Behavior Rules?

FVG behavior rules are the conventions Smart Money Concepts / ICT traders layer on top of the basic fair value gap definition to decide which gaps matter and what price is expected to do with them. Not every three-candle imbalance is treated equally. The rules classify gaps by origin (formed inside a displacement leg, at a session open, straight off a stop run) and by order, with the first gap presented after a chosen anchor (commonly the New York open) ranked above everything that forms later. They then grade the reaction: a gap is respected when price trades into it and continues in the original direction, and disrespected when price closes through the far side, at which point many traders re-label the span an inversion FVG and flip its role.

Two further rules refine the read. Depth: a fill that reaches only the gap's midpoint (consequent encroachment) still counts as respect, so many traders watch the midpoint rather than the far edge as the line between a shallow, healthy retest and a fill deep enough to question the gap. Expectation: gaps born of genuine urgency (breakaway gaps leaving a base or a sweep) are not expected to fill and stand as evidence of strength, while ordinary gaps are expected to rebalance eventually, sometimes on the very next candle (the immediate rebalance case, usually read as continuation rather than weakness). None of this is standardized: the labels come from mentorship material, and different sources draw the lines differently, so treat the rules as shared vocabulary for describing gap behavior, not a fixed rulebook.

How traders use it

• As a quality filter: instead of trading every imbalance, traders keep only gaps formed by displacement through a meaningful level or inside a recognized time window, and discard those printed in quiet, two-way conditions.
• To rank entries within a session: the first presented FVG after the chosen anchor becomes that window's reference entry zone; later, overlapping gaps are treated as progressively lower quality.
• To grade reactions in real time: respect at the edge or the midpoint keeps the original bias intact, while a close through the far side flips the gap's role, so it is watched as a candidate inversion setup rather than simply written off as invalidated.
• To set expectations per gap type: a breakaway gap is left open as evidence of strength (and sometimes becomes a target from the other side), a rebalancing gap is watched as an entry, and a gap that fills at once is read as the market squaring up before continuing.

FVG behavior rules vs neighboring gap concepts