Trading
Inefficiency
A price area where the market moved without proper price discovery.
Full Definition
Market inefficiency refers to price areas where rapid movement occurred without proper two-sided price discovery. These appear as gaps, FVGs, or areas of single-print auction. Efficient markets tend to return to inefficient zones to allow proper price discovery before continuing. Traders use these as entry zones.
Example
Price gaps up at market open, leaving an inefficient zone. Throughout the session, price pulls back to fill this inefficiency before resuming the trend.
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