Fair Value Gap
Last updated
Last updated
This indicator helps traders identify Fair Value Gaps — areas on the chart where price moved too quickly, leaving an imbalance between buyers and sellers. These gaps often act as magnets, drawing price back for a potential "fill" before continuing the trend.
A bullish FVG forms when a candle's low is higher than the previous candle's high.
A bearish FVG forms when a candle's high is lower than the previous candle's low.
When price overlays part of the FVG, it turns gray to signal a partial fill.
Displays volume inside each FVG to show strength of the move.
After a bullish FVG is formed, a ▼ may appear above it — this often signals exhaustion and possible mean reversion.
Optional horizontal line through the center of each FVG for reference.
Timeframe setting allows detecting FVGs from different timeframes (e.g., higher timeframes).
Use bullish FVGs as potential support zones.
Use bearish FVGs as resistance during pullbacks or breakdowns.
Pay attention to volume to gauge the importance of each gap.
Watch for red triangle signals after bullish FVGs to anticipate short-term reversals.
Use higher timeframe mode for stronger context zones.
Adjust threshold to focus on only significant gaps.
The Fair Value Gap (FVG) settings allow traders to customize how Fair Value Gaps are identified and displayed on the chart. Here’s a breakdown of each option:
Enable FVG: Turns the Fair Value Gap indicator on or off.
Show Past: Sets the number of historical FVGs to display. This helps in analyzing past price action and understanding how previous gaps influenced the market.
Timeframe: Selects the timeframe for identifying FVGs. You can choose the current chart’s timeframe or set a specific one, which is helpful for multi-timeframe analysis.
FVG Type: Allows selection of specific gap types to display, such as bullish, bearish, or all FVGs. This lets traders focus on gaps in line with their trading strategy.
FVG Threshold: Determines the size of the Fair Value Gaps. A higher threshold may reduce the number of gaps displayed, showing only the most significant ones.
Extension: Adjusts the length of each FVG’s display on the chart, making it easier to see them over extended time periods.
Mitigation Method: Sets the method for identifying when an FVG has been "filled" or mitigated, using either Wicks or Close of the candles. This helps to track when price action has revisited and potentially neutralized a gap.
Hide Overlapped FVG: Hides Fair Value Gaps that overlap with others, reducing clutter and ensuring that only distinct gaps are visible.
These settings provide flexibility in how Fair Value Gaps are displayed, allowing traders to tailor the indicator to fit different trading styles and market conditions.
In essence, Fair Value Gaps represent price imbalances that the market may attempt to correct over time, making them valuable areas for traders seeking potential reversals, continuations, or liquidity entries.
