Fair Value Gap

Identify three-candle imbalances where price moved too fast, leaving gaps that act as future support and resistance.

Overview

An FVG forms when price moves so quickly in one direction that a three-candle sequence creates an imbalance — a gap between the wicks that price didn't trade through.

• Bullish FVGs appear as gaps between the high of candle one and the low of candle three during upward moves
• Bearish FVGs form between the low of candle one and the high of candle three during downward moves

Gaps disappear once price closes fully through them — a body close below the bottom of a bullish FVG or above the top of a bearish FVG counts as mitigation.

The indicator tracks three gap types: standard bullish/bearish FVGs and opening gaps (NWOG and NDOG).

Settings

Bullish FVG Color — Color picker (default: green) Fill color for bullish imbalances that function as support zones.

Bearish FVG Color — Color picker (default: red) Fill color for bearish imbalances that function as resistance zones.

Opening Gap Color — Color picker (default: gray) Marks NWOG (New Week Opening Gap) and NDOG (New Day Opening Gap) boxes on the chart.

Combine Consecutive FVGs — Toggle (default: off) When enabled, back-to-back FVGs of the same direction that form on consecutive bars are merged into a single larger box.

Show Consequent Encroachment — Toggle (default: off) Displays a dashed line at the 50% midpoint of each FVG. This CE line often marks the most precise reaction point within a gap.

Show Border — Toggle (default: on) Adds outline borders around FVG boxes for visual clarity.

How We Use It

We use this tool to identify where price is likely to return after displacement moves. On 1-minute and 5-minute charts, unmitigated FVGs serve as our primary re-entry zones — especially when they align with higher-timeframe levels.