HTF Inversion Fair Value Gap

The HTF Inversion Fair Value Gap indicator identifies and displays the most recent Inversion Fair Value Gap (IFVG) from a higher timeframe directly onto your current chart. This tool helps traders visualize broader market shifts and significant institutional imbalances that have reversed their original intent, acting as potential support or resistance levels.

Usage

The Usage section focuses on how the script helps traders identify "flipped" liquidity zones. An Inversion Fair Value Gap occurs when a standard FVG is completely breached by price action, suggesting that a previously bullish gap is now a bearish resistance zone, or a previously bearish gap is now a bullish support zone.

Examples of use cases include:

• Confirmation Signals: Using higher timeframe IFVGs as a directional bias for lower timeframe entries.
• Support & Resistance: Identifying zones where price action is likely to react based on institutional order flow from higher timeframes.
• Divergence Analysis: Monitoring how the current price interacts with the higher timeframe IFVG boundaries to spot potential reversals.

Details

Fair Value Gaps (FVG) are three-bar formations representing market imbalances. When price action returns to and closes beyond the boundaries of an FVG, it becomes "Inverted." This indicator automates the process of finding these zones on a user-specified higher timeframe (e.g., 4H or Daily) and projecting them onto the current intraday chart.

The visual representation includes:

• Opaque Dashed Lines: Represent the high and low of the original FVG formation.
• Semi-transparent Dashed Line: Marks the specific candle that invalidated the FVG and triggered the inversion.
• Vertical Wicks: Show the current divergence between the price extremes and the IFVG boundaries.

Settings

General Configuration

• Higher Timeframe: Specifies the timeframe to scan for the latest IFVG.
• IFVG Zone Invalidation: Determines if a zone is considered invalidated based on a candle wick or a candle close.

Fair Value Gaps

• Zone Invalidation: Sets the detection method (Wick vs. Close) for the initial FVG.
• Zone Filtering: Filters gaps based on "Average Range" or a specific "Volume Threshold" to focus on significant moves.
• FVG Detection: Choose between "Same Type" (all three candles must be the same direction) or "All" (varied candle directions).
• Detection Sensitivity: Adjusts the size requirement of the gaps detected (Low, Normal, High).

Customization

• Offset: Shifts the IFVG rendering to the right of the current price action to improve chart visibility.
• Width: Controls the horizontal length of the rendered IFVG box.

FAQ

How do I interpret a bullish vs. bearish IFVG? A bullish IFVG occurs when a bearish FVG is closed above, turning it into a support zone. A bearish IFVG occurs when a bullish FVG is closed below, turning it into a resistance zone.

Why is the indicator not appearing on my chart? Ensure that the "Higher Timeframe" setting is strictly higher than the timeframe you are currently viewing. For example, if you are on a 15m chart, the HTF must be 30m or higher.

How can I access the HTF Inversion Fair Value Gap? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.