ICT FVG Buy/Sell Signals

The ICT FVG Buy/Sell Signals indicator is a comprehensive technical analysis tool designed to identify high-probability entry points based on Inner Circle Trader (ICT) core concepts, including Fair Value Gaps and Premium/Discount arrays. It streamlines the identification of market imbalances and institutional intent by filtering for displacement and price location within a dealing range.

Usage

The tool automatically identifies bullish and bearish Fair Value Gaps (FVGs) and marks their Consequent Encroachment (CE) levels. Signals are generated when the price returns to these zones under specific conditions.

To use the indicator effectively, traders should look for:

• BUY Signals: These appear when the price retraces into a bullish FVG located within the "Discount" zone (teal background) and displays bullish displacement with a close above the FVG's midpoint.
• SELL Signals: These appear when the price retraces into a bearish FVG located within the "Premium" zone (red background) and displays bearish displacement with a close below the FVG's midpoint.

The tool includes visual aids such as shaded backgrounds for Premium/Discount zones, a yellow equilibrium line for the current dealing range, and circular plots representing the midpoint of the most recent FVGs.

Details

The script utilizes several key ICT-based mechanics:

• Fair Value Gaps (FVG): Imbalances created by a three-candle sequence where there is a gap between the first candle's wick and the third candle's wick.
• Consequent Encroachment (CE): The 50% midpoint of an FVG, which often acts as a significant support or resistance level.
• Dealing Ranges: The script identifies swing highs and lows to establish a range. The area above the midpoint is the Premium zone (ideal for selling), and the area below is the Discount zone (ideal for buying).
• Displacement: This is measured by comparing the candle body size to the Average True Range (ATR). A signal requires a "strong" candle to confirm institutional displacement.

Settings

Core Settings

• Swing length: Determines the number of bars used to detect the pivot highs and lows that define the current dealing range.
• Only Buy in Discount / Sell in Premium: A toggle to filter signals based on their location within the dealing range to ensure trades are taken at favorable prices.
• Min body size as ATR multiple (displacement): Defines how large a candle body must be relative to the ATR to qualify as valid displacement.
• ATR length: The lookback period used to calculate the Average True Range for displacement filtering.

FAQ

How do I interpret the background colors?

The red background indicates the Premium zone (favors shorts), while the teal background indicates the Discount zone (favors longs). The yellow line represents the equilibrium (50%) of the current range.

What does "CE" mean on the chart?

CE stands for Consequent Encroachment. It is the midpoint of the Fair Value Gap. The indicator plots dots at these levels to show where the price is relative to the gap's center.

How can I access ICT FVG Buy/Sell Signals?

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