During robust market trends, a Fair Value Gap emerges when a particular candle fails to overlap with the bodies of the preceding and succeeding candles.
In such scenarios, owing to the disparity between buying and selling pressures, the market tends to revisit these zones to rectify the imbalances. The indicator designates bearish gaps using orange boxes and bullish gaps with green boxes.
You can access the Indicator from this link:
https://tradingfinder.com/products/i.../fvg-detector/
You can access the Indicator on the TradingView website:
https://www.tradingview.com/script/7...nce-Mitigated/
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Indicator Table
- Indicator Categories: ICT TradingView Indicators, Smart Money TradingView Indicators, Liquidity TradingView Indicators
- Platforms: TradingView Indicators
- Trading Skills: Expert
- Indicator Types: Reversal TradingView Indicators, Leading TradingView Indicators, Non-Repaint TradingView Indicators
- Timeframe: Multi-Timeframe TradingView Indicators
- Trading Style: Intraday TradingView Indicators, Day Trading TradingView Indicators, Scalper TradingView Indicators
- Trading Instruments: TradingView Indicators in the Forex Market, Cryptocurrency TradingView Indicators, Stock TradingView Indicators
Overview
The Inner Circle Trader (ICT) methodology, pioneered by Michael Huddleston, represents an sophisticated approach in technical analysis.
It is grounded in principles of liquidity and price disequilibrium. A fundamental component of ICT involves recognizing Fair Value Gaps (FVG).
This indicator autonomously identifies both bullish and bearish gaps on the price chart, obviating the necessity for manual examination.
Fair Value Gap (FVG) in a Bullish Trend
In the illustration below, the Brent Crude Oil price chart on a 5-minute timeframe depicts a Bullish Fair Value Gap (FVG) that materialized amid an ascending trajectory.
Thereafter, the price retraced to this gap to restore equilibrium in the imbalanced region.
This FVG, denoted by a green box, has proficiently functioned as a support threshold, enabling the persistence of the bullish momentum.
Fair Value Gap (FVG) in a Bearish Trend
In the illustration below, the price chart of the USD/CHF currency pair on a 5-minute timeframe is presented.
A bearish Fair Value Gap (FVG) has developed during a descending movement. The price has reverted to this gap to restore equilibrium in the imbalanced region.
This FVG, denoted by an orange box, has proficiently operated as resistance, enabling the continuation of the bearish momentum.
Settings of the FVG Detector Indicator
- FVG Filter: Activate (On) to eliminate superfluous FVGs.
- FVG Filter Type: Configure to Defensive mode for gap filtration.
- Show Demand FVG: Exhibit bullish gaps (demand).
- Show Supply FVG: Exhibit bearish gaps (supply).
Descriptions
- Aggressive: In this configuration, the middle candle must not be diminutive in size, resulting in the exclusion of a greater quantity of gaps.
- Defensive: In this configuration, the middle candle should be comparatively substantial and predominantly consist of the body. Moreover, for bullish gaps, the second and third candles must be positive; for bearish gaps, they must be negative.
Conclusion
Within the Inner Circle Trader (ICT) framework, the detection of Fair Value Gaps (FVGs) holds paramount importance; thus, traders demand exceptional accuracy and proficiency.
Accordingly, the Fair Value Gap (FVG) Detector indicator delivers a critical capability by autonomously identifying gaps on the price chart, bypassing manual scrutiny and maintaining a negligible error margin.
This empowers traders to concentrate on strategic planning and trade execution instead of the laborious process of gap detection.
