Implied FVG

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.

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.