Inversion Fair Value Gaps (IFVG)

Inversion Fair Value Gaps (IFVG) marks the spots where a failed gap switches sides. An inversion FVG forms when price closes through an entire fair value gap against its original bias: the broken bullish gap becomes candidate resistance, the broken bearish gap candidate support. The indicator plots each inversion as it develops and signals the retests that confirm the new role.

How to Trade the Inversion Fair Value Gaps (IFVG)?

• Bullish signal: price returns to a bullish inversion zone and exits through the top — the level held as support.
• Bearish signal: price revisits a bearish inversion zone and rejects it — resistance confirmed.
• Zone resets: once an inversion zone is itself mitigated, its areas, lines, and signals are cleared so only live levels remain on the chart.
• Alerts: alert conditions cover both the bullish and bearish retest signals for hands-off monitoring.

The tool is deliberately oriented to live analysis. Because inversion zones reset dynamically as they are mitigated, historical bars cannot reproduce the state a trader actually faced at the time, so judge it forward on real-time markets rather than by scrolling back.

Inversion Fair Value Gaps (IFVG) Settings

• Show Last: how many recent bullish/bearish inversion pairs stay visible, up to 100.
• Signal Preference: derive retest signals from wicks or from closing prices.
• ATR Multiplier: filters gaps by width, keeping only inversions wider than the ATR-scaled threshold.

Frequently Asked Questions

Why is it aimed at real-time use rather than backtesting?

Mitigations reset zones and signals as they occur, and that dynamic state is exactly what the method trades. Historical bars flatten it away, so past charts understate what the indicator was showing in the moment.

How does it relate to other fair value gap tools?

Most gap tools follow open gaps and retire them once filled; this one begins precisely where those stop. For a study centered on the filling process itself, the Fair Value Gaps Mitigation Oscillator makes mitigation its whole subject.

How do I access the Inversion Fair Value Gaps (IFVG) indicator?

Access is free through the LuxAlgo Library. Straight from this page you can also run it inside LuxAlgo's AI, Quant, and watch inversion behavior on your preferred symbols.