Multitimeframe Fair Value Gap – FVG

The Multitimeframe Fair Value Gap – FVG indicator provides a dynamic visualization of institutional imbalances across multiple timeframes. This tool identifies price inefficiencies where market gaps form between candle wicks, helping traders highlight potential support and resistance zones, unmitigated gaps, and directional bias.

Usage

The indicator can be used to identify key institutional "footprints" on any timeframe, regardless of the chart currently being viewed. Traders can use these zones to anticipate sharp price reactions or liquidity sweeps.

• Trend Filtering: Use the built-in Butterworth trend filter to align FVG entries with the broader market direction. In an uptrend, focus on bullish FVGs; in a downtrend, focus on bearish FVGs.
• Volume Context: Observe the bull/bear power bars within each FVG box to understand the buying and selling effort that created the gap. A bullish FVG with strong buy effort suggests high conviction, while a bullish FVG dominated by sell effort may indicate a potential trap.
• Mitigation Tracking: Monitor active gaps to see if they have been touched at the midpoint or fully closed. This helps in managing risk and identifying which zones remain relevant for future price action.
• FVG Table: Enable the on-chart table to maintain a watchlist of all currently unmitigated gaps, including their formation timestamps and directional bias.

Details

A Fair Value Gap (FVG) is identified using a three-candle sequence where a market imbalance leaves a gap between the wicks of the first and third candles. This script utilizes request.security() to fetch data from the user-defined timeframe.

The indicator uses "Wick Sensitivity" logic to ensure that only significant price dislocations are plotted. It compares the candle body size to a running average; only moves that meet the sensitivity threshold are confirmed as FVGs. The trend filter is implemented via a two-pole Butterworth low-pass filter, which offers a smooth directional signal by processing average FVG values.

Settings

FVG Timeframe

• Timeframe: Select the source timeframe for FVG calculations (e.g., 1H, 4H, Daily).
• Sensitivity: Adjust the threshold for validating a gap based on the impulsiveness of the move.

FVG Mitigation

• Mitigated on mid: Toggle whether an FVG is considered resolved when price touches its midpoint or only after a full fill.

FVG Table

• Show FVG table: Toggle the visibility of the real-time FVG tracking table.
• Table Left / Right: Adjust the horizontal position and width of the table on the chart.

FVG Style

• Extend Boxes: Set the horizontal length of the FVG boxes in bars.
• Colors: Customize the colors for bullish, bearish, and neutral FVG zones.

Trend

• Show FVG Trend: Enable or disable the FVG-based trendline.
• Passband Ripple (dB): Controls the sensitivity and overshoot of the trend filter.
• Cutoff Frequency: Determines how quickly the trendline reacts to price changes.

FAQ

How do I access the Multitimeframe Fair Value Gap – FVG?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Can I see FVGs from a 1-hour chart while looking at a 5-minute chart?

Yes, by adjusting the "Timeframe" setting in the FVG Timeframe group, you can source data from any timeframe higher or lower than your current view.

What is the difference between a "mitigated" and "unmitigated" FVG?

An unmitigated FVG is an active zone where price has not yet returned to fill the imbalance. A mitigated FVG is one where the price has revisited the zone (either the midpoint or the full range, depending on your settings), suggesting the imbalance has been resolved.