Fair Value Gap

The Fair Value Gap indicator is a technical analysis tool designed to identify and display valid, rule-based Fair Value Gaps (FVG) and Inverted Fair Value Gaps (iFVG) based on strict candle-close confirmation.

Usage

The tool helps traders identify areas of price imbalance by detecting the traditional 3-candle FVG structure. It can be used to spot potential areas of support/resistance or trend continuation.

• Bullish/Bearish FVGs: These appear when price creates a gap between the wick of the first candle and the wick of the third candle. They are displayed as colored boxes that extend until price closes through them.
• Inverted FVGs (iFVG): If a valid FVG is breached by a candle close, the indicator can convert that zone into an iFVG, which often serves as a flipped support or resistance area.
• Dynamic Visuals: Zones automatically extend to the current price plus a user-defined offset, ensuring the most relevant imbalances are always visible on the right edge of the chart.

Details

The indicator operates exclusively on the close of a candle to prevent repainting and premature signals. A bullish FVG is detected when the low of the current candle is higher than the high of the candle from two periods ago. Conversely, a bearish FVG is detected when the high of the current candle is lower than the low of the candle from two periods ago. The script uses arrays to manage a specific number of active zones, ensuring the chart remains clean and performance-friendly.

Settings

Colors

• Bullish FVG Farbe: Sets the background color for bullish Fair Value Gaps.
• Bearish FVG Farbe: Sets the background color for bearish Fair Value Gaps.
• iFVG Farbe: Sets the background color for Inverted Fair Value Gaps.

Display Logic

• iFVG anzeigen: Toggles the visibility of Inverted Fair Value Gaps.
• Max. aktive FVG: Determines the maximum number of combined bullish and bearish FVGs displayed on the chart.
• Max. iFVG sichtbar: Determines the maximum number of iFVGs displayed on the chart.
• FVG/iFVG Extension: Configures how many bars past the current price the boxes should extend.

Visuals

• Textposition vertikal/horizontal: Adjusts where the labels (FVG/iFVG) are placed relative to the boxes.
• Schriftgröße: Adjusts the size of the labels.

FAQ

How do I access Fair Value Gap?

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

Does this indicator repaint?

No, the script is designed to validate gaps only upon candle close, ensuring that signals remain fixed once the candle is confirmed.

Why do some gaps disappear?

Gaps are automatically removed or converted once the price closes beyond the defined range of the FVG or iFVG, or if the "Max visible" limit is reached to keep the chart clean.