Is an implied FVG the same as an inversion FVG?

No. Both get shortened to IFVG, which is the whole problem. An implied FVG is a gap that never literally formed, projected from long overlapping wicks around a strong middle candle. An inversion FVG is a real gap that failed and flipped roles, old support acting as resistance. When a tool says IFVG, check which one it means.

Are implied fair value gaps as reliable as regular ones?

There is no solid public statistic either way, and the pattern itself is loosely specified; wick-length requirements vary by trader and tool. Common practice treats implied gaps as weaker evidence than true gaps: useful when they line up with structure or other zones, and rarely traded on their own.

How long do the wicks need to be?

The specification's soft spot: no fixed answer exists. Detection tools impose their own qualifying ratios, wicks at some minimum fraction of their candle's range, and discretionary traders judge prominence by eye, which is why two charts mark different implied gaps on the same bars. The workable discipline is consistency, fixing one rule and keeping it, since the zone's meaning comes from the convention being stable.

Why draw the zone from wick midpoints?

Because the methodology already treats a wick's midpoint as its decision line: a wick is probed, unaccepted territory, and its consequent encroachment marks how much of that probe still counts as unfinished. Building the implied gap between the two midpoints applies that convention symmetrically, claiming the span both probes half-covered as the under-auctioned territory. It keeps the implied construction consistent with how the framework reads wicks everywhere else.

Can an implied FVG invert like a real gap?

Yes, the same failure logic applies: an implied zone that price closes through decisively can flip roles, probed support becoming resistance, and traders who track implied gaps grade those violations with the standard behavior rules. The terminology becomes genuinely unfortunate at that point, an inverted implied FVG colliding with both meanings of IFVG, which is one more argument for tools labeling their objects explicitly.

Should implied gaps be traded on their own?

The consistent answer across treatments is no: the pattern ranks as secondary evidence, a refinement layer over levels that structure, order blocks or retracement logic already nominate. Its best use is salvage and sharpening, giving an energetic leg a zone where the raw candles left none, and tightening an entry inside a confluence that would justify attention anyway. A lone implied gap in empty space is a hypothesis, not a setup.

Concept

Implied FVG

Implied FVG is a Smart Money Concepts / ICT concept. The Library holds 1 implementation, a working definition you can pull into Quant.

Top Implied FVG indicator

The top custom implementation, built on the original standard Implied FVG formula.

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ICT Implied Fair Value Gap (IFVG)

Indicator

What is an Implied FVG?

An implied fair value gap is the wick-built cousin of the standard three-candle imbalance. No literal gap exists (the first and third candles' wicks overlap, so a true fair value gap never printed), but both wicks are long and point into the middle candle. The zone is drawn between wick midpoints: in the bullish case, from the middle of candle one's upper wick to the middle of candle three's lower wick, below the close of a strong up-closing middle candle. That span is the 'implied' gap: territory the wicks only probed, treated as an inefficiency the market may later revisit.

One naming trap: implied FVGs get abbreviated IFVG, and so do inversion FVGs, a completely different concept (a real gap that failed and flipped polarity). The implied variant is also a later, less standardized addition to the imbalance family: wick-midpoint construction is the common convention, but how long the wicks must be has no fixed answer, so markings differ between traders and tools.

The wick-midpoint construction carries its own logic. A wick is territory probed but not accepted, a one-sided excursion that closed back out, so the methodology treats its midpoint as the honest boundary of the unfinished business, the same consequent encroachment convention used inside true gaps and prominent wicks generally. Between two such midpoints, around a middle candle whose strong body shows genuine displacement, lies the span the pattern claims was under-auctioned even though the raw wicks technically overlapped. Detection tools tighten the loose parts with qualifying ratios: minimum wick lengths relative to their candles, and a middle body strong enough to certify the displacement.

Its standing in the hierarchy is deliberately junior. Implementations from the Library's implied-gap detector to combined builds that stack implied gaps with balanced price ranges and retracement zones all treat the pattern as secondary evidence: a way to salvage a workable reference from an energetic leg that left no clean gap, ranked below true gaps and traded on confluence, an implied zone overlapping an order block or landing inside a deep retracement earning attention that a lone wick pattern would not. The looseness of the specification is the honest reason for the demotion: a pattern whose qualifying rules vary by tool cannot carry a playbook alone.

How to identify an implied FVG

Three candles, two long wicks, one projected span: the construction is specific even where the thresholds are not.

1Find a three-candle sequence where no true gap printed: the outer candles' wicks overlap across the middle candle's range.
2Require the wick geometry: both outer candles carry long wicks pointing into the middle candle, the probes that define the implied span.
3Require the middle candle's strength: a decisive directional body, since the pattern is salvaging a reference from genuine displacement.
4Draw the zone between wick midpoints: from the middle of the first candle's wick to the middle of the third's, with the zone's own midpoint as the finer level.
5Rank it honestly: a secondary zone that earns attention through confluence with structure, order blocks or retracement levels, not a standalone signal.

How it's calculated

A support or resistance zone bounded by the wick midpoints of a three-candle sequence whose outer wicks overlap, implying an imbalance even though no literal gap printed.

\operatorname{UWM}_x = \frac{H_x + \max(O_x, C_x)}{2}

\operatorname{LWM}_x = \frac{\min(O_x, C_x) + L_x}{2}

\text{Bullish implied FVG at bar } t\text{: } \operatorname{LWM}_t > \operatorname{UWM}_{t-2} \text{ and } L_t \le H_{t-2}

\text{Bullish zone: } \text{bottom} = \operatorname{UWM}_{t-2},\; \text{top} = \operatorname{LWM}_t

\text{Bearish implied FVG at bar } t\text{: } \operatorname{UWM}_t < \operatorname{LWM}_{t-2} \text{ and } H_t \ge L_{t-2}

\text{Bearish zone: } \text{top} = \operatorname{LWM}_{t-2},\; \text{bottom} = \operatorname{UWM}_t

\text{midline} = \frac{\text{top} + \text{bottom}}{2}

O_x: open of the candle at bar x

H_x: high of the candle at bar x

L_x: low of the candle at bar x

C_x: close of the candle at bar x

x: candle index placeholder; the pattern spans bars t-2, t-1, and t

t: index of the third candle, where the pattern completes; t-1 is the large middle candle

UWM_x: upper wick midpoint of candle x, halfway between its body top max(O, C) and its high

LWM_x: lower wick midpoint of candle x, halfway between its low and its body bottom min(O, C)

top: upper boundary of the drawn zone

bottom: lower boundary of the drawn zone

midline: center of the zone, the 50 percent level watched for mitigation

The middle candle is a strong directional candle and both outer candles need visible wicks; if the outer wicks do not overlap at all, the pattern is a regular fair value gap instead.

The zone trades like a standard FVG: price returning into it, often to the midline, is read as mitigation.

Defined in ICT's 2023 material; implementations often add a minimum zone height or an ATR filter to drop trivial patterns.

How traders use it

Like a standard gap once drawn: a retracement into the zone is watched for support or resistance, with the zone's midpoint used as the finer level in the same way consequent encroachment is used inside true gaps.
To salvage a reference from a displacement leg that left no clean gap: when an energetic move's candles overlap only by their wicks, the implied gap gives the leg a workable zone instead of nothing.
As secondary confluence rather than a standalone signal: most treatments rank implied gaps below true gaps and want overlap with structure or other arrays before acting on one.
Inside retracement frameworks: an implied zone landing within a deep pullback of the displacement leg merges the wick evidence with optimal trade entry logic, each qualifying the other.
Stacked with other arrays: combined tools mark implied gaps beside true gaps and balanced ranges so overlaps stand out, the implied zone's job being to upgrade or refine a level that other evidence already nominates.

Implied FVG vs related imbalance concepts

Fair Value Gap: The true gap is literal: a span no trade touched, visible in raw candle geometry. The implied version is projected: wick midpoints standing in for boundaries that never separated. The reading grammar transfers, but the evidence is one grade softer, and rankings reflect it.

Inversion FVG: The naming collision to defuse: an inversion FVG is a real gap that failed and flipped polarity, old support acting as resistance. Same abbreviation, entirely different object. Any tool or text saying IFVG owes you a definition before you trade what it marks.

Bullish/Bearish Order Block: The order block zones the candle bodies before displacement; the implied gap zones the wick-probed territory around it. They frequently overlap at the same reversals, and that overlap is precisely the confluence that lifts an implied gap from curiosity to tradeable reference.

Concept family

Smart Money Concepts / ICT

54 concepts mapped · 54 in the Library

Implied FVG FAQ

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