ICT - GAPS, Volume & Price Imbalances

The ICT - GAPS, Volume & Price Imbalances indicator is a comprehensive technical analysis tool designed to identify and visualize various price and volume delivery anomalies including Gaps, Volume Imbalances (VI), Fair Value Gaps (FVG), and Implied FVGs. It helps traders pinpoint potential institutional activity and areas where price may return to "rebalance" before continuing its trend.

Usage

The indicator can be used to identify key support and resistance zones based on price inefficiencies. Traders typically monitor these zones for specific price action behaviors:

• Rebalancing: Price often returns to fill a Gap or Volume Imbalance. This tool highlights these areas until they are mitigated or "engulfed" by price action.
• Trend Confirmation: Using the "FVG" or "Liquidity Void" settings allows traders to see where strong momentum has left behind inefficiencies, often serving as entry points in a trending market.
• Inversion Zones: By enabling "Inverse FVG," traders can see when a previously bearish FVG is broken and begins acting as bullish support (and vice versa).

Details

The tool categorizes imbalances into three primary types:

• Volume Imbalances: Identified by comparing the body of two consecutive candles (the close of the first to the open of the second), representing a lack of trading volume within that specific price range.
• Gaps: Areas where price has skipped entirely. The tool differentiates between "True Gaps" (no delivery at all) and "Gap + Inefficiency" (including body gaps).
• Fair Value Gaps (FVG): Three-candle sequences where the first candle's wick and the third candle's wick do not overlap, leaving a void in price delivery.
• Mitigation Logic: Users can choose between "Engulf" (requiring a candle body to close past the zone) or "Mitigate/Rebalance" (simple price touch) to determine when a zone is no longer active.

Settings

Volume Imbalance

• Volume Imbalance Type: Choose between None, Classic, or Advanced detection modes.
• VI Mitigation Type: Select "Engulf" or "Mitigate" to define how boxes are removed from the chart.
• Maximum Box Displayed: Limits the number of active VI boxes to maintain chart clarity.

GAPs

• GAPs Type: Toggle between "True GAP" and "GAP + Inefficiency."
• GAP Consequent Encroachment (C.E.): Displays a midline for the gap, representing the 50% equilibrium level.
• Extend Unmitigated GAP Boxes: Automatically extends active gap zones to the current bar.

FVG

• FVG Type: Options for Normal Fair Value Gaps or Liquidity Voids (consecutive FVGs).
• Implied FVG: Enables the detection of gaps derived from candle wicks and bodies rather than the standard three-candle FVG.
• Inverse FVG Mode: Tracks FVG zones after they have been breached to identify potential support/resistance flips.

FAQ

How do I access this tool?

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

What is the difference between Engulf and Mitigate?

"Mitigate" clears the zone as soon as price touches the area. "Engulf" requires a candle body to close above or below the zone, signifying a more significant shift in market structure.

What is Consequent Encroachment (C.E.)?

C.E. refers to the 50% level of a gap or FVG. In ICT concepts, this midline is often a high-sensitivity area where price is expected to react.