FVG Price & Volume Graph

The FVG Price & Volume Graph tool is a powerful trading indicator designed to highlight and visualize significant fair value gaps in the market, showing the volume traded within these areas. This feature allows traders to identify crucial zones where high liquidity is present, offering a unique edge in market analysis. The indicator further enhances its utility by presenting levels from these high-volume fair value gap areas, making it a valuable tool for traders seeking to leverage key price action concepts.

How to Use the FVG Price & Volume Graph Tool for Trading?

Fair Value Gaps (FVG) emerge when there's a significant disparity between supply and demand, creating a gap in price action that the market often revisits to "fill." The FVG Price & Volume Graph tool effectively captures and displays these FVG areas and the associated volume, providing traders with insights into potential market moves.

This tool not only highlights the height of the FVG areas but also the volume involved at the time of their formation. Typically, fair value gaps with higher volumes are more pronounced and are visually placed towards the right of the chart, making them easy to spot.

Traders can tailor the display by adjusting the "Display Amount" setting to show a specific number of recent FVGs. By enabling or disabling the "Consider Mitigation" setting, you can choose whether to include gaps that have already been filled, aiding in identifying historical price imbalance locations.

Moreover, the tool can identify potential support and resistance levels by using average areas from the FVGs with the highest volumes. You can adjust the "Highest Volume Averages" setting to extend these levels further.

Analyzing Volume/Price Dynamics within FVGs

The tool utilizes a linear regression model to correlate FVG areas and their volumes. This regression offers a predictive glimpse into possible future FVG locations based on current market data. While this model provides a trend-like visualization, it's crucial to remember that FVGs don't always adhere to linearity, hence predictions should be taken with caution.

Important Details and Technical Insights

Intrabar Data Timeframe (TF)

When an FVG is formed by three candles, the tool assesses the volume within the gap by examining lower timeframe candles of the middle formation candle. This detailed volumetric analysis can yield highly accurate results, especially when a "lower Intrabar Data TF" is selected, although it may require more computational resources and could be limited by available data.

Customizable Display Options

The FVG Price & Volume Graph tool offers various customization settings. You can adjust the "Graph Resolution" to determine the precision of FVG locations along the X-axis. There’s also an option to decide how many labels appear on the X-axis.

For visual differentiation, FVG areas can be color-coded using gradients based on either the area size or the trading volume associated with the FVG.

Adjustable Settings

• Display Amount: Controls how many recent FVGs are shown.
• Highest Volume Averages: Sets the number of highest volume FVG average levels to show and extend.
• Consider Mitigation: Allows filtering of only unmitigated FVGs.
• Filter FVGs Outside Visible Range: Ensures only FVGs within the current visible chart range are displayed.
• Intrabar Data TF: Specifies the timeframe for intrabar data, which should be lower than the main chart timeframe.

Frequently Asked Questions (FAQs)

How do I access the FVG Price & Volume Graph tool? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What is the purpose of using FVG in trading? FVGs are essential for identifying price action imbalances where the market is likely to return or react, providing strategic entry or exit points based on historical supply and demand dynamics.

Can the tool display mitigated FVGs? Yes, by disabling the "Consider Mitigation" option, you can visualize areas where FVGs have been filled, which can be useful for analyzing past market behavior.