Consequent Encroachment

What is Consequent Encroachment?

Consequent encroachment (usually just CE) is the midpoint of a fair value gap: the 50% line between the gap's boundaries. ICT vocabulary applies the same term to the midpoint of a candle wick, which the methodology reads as a small single-candle inefficiency of its own. In both cases CE turns a zone into something more precise: an exact middle against which reactions can be judged.

The midpoint matters because it splits the imbalance into its own premium and discount halves; a return that reaches CE has rebalanced half the inefficiency. Many FVG playbooks anchor rules to that line: entries at it, invalidation through it, respected-versus-disrespected reads around it. Reaction at CE is a tendency the methodology claims and builds on, not a guarantee — plenty of gaps trade straight through their midpoint without pausing.

How traders use it

• As an entry refinement inside a gap, rather than bidding the near edge, wait for price to reach CE and reject there. The trade-off is explicit: tighter entries and smaller stops on the fills you get, in exchange for missing the gaps that turn before the midpoint.
• As a validity line: a common rule-set treats a gap as respected while closes hold on the near side of CE, and as weakened once price closes through it, shifting expectation toward a full fill; FVG behavior rules collects these conventions.
• As a wick-based level: the midpoint of a prominent wick is watched the same way, as a reaction level or partial-fill target, on the reading that a long wick is an inefficiency the market may only half-revisit.