ICT Inversion Fair value Gap (IFVG)

The ICT Inversion Fair value Gap (IFVG) indicator identifies and visualizes critical market zones that form when traditional Fair Value Gaps are invalidated by price action, offering insights into institutional order flow and potential reversals.

Usage

The Usage section describes how the script can be used to identify shifts in market sentiment. Traders can use this tool to spot when a price imbalance (FVG) fails to hold, indicating a "flip" in the zone's role.

• Bullish IFVG: Occurs when a bearish FVG is broken to the upside. The zone, which previously might have acted as resistance, is now projected as potential support.
• Bearish IFVG: Occurs when a bullish FVG is broken to the downside. The zone, which previously might have acted as support, is now projected as potential resistance.

The indicator is applicable across various styles:

• Scalping: Identifying quick intraday reversal points on lower timeframes.
• Swing Trading: Spotting major structural shifts on higher timeframes that may act as long-term magnets for price.

Details

Inversion Fair Value Gaps are a core concept in ICT (Inner Circle Trader) methodologies. They represent areas where "smart money" has overcome a previous imbalance, effectively turning a gap into a support or resistance level. This script automates the detection of these gaps by monitoring price closes relative to established FVG boundaries. When a close occurs beyond the gap's threshold, the indicator transforms the zone into an IFVG, extending it forward to assist in visual analysis.

Settings

• Bullish IFVG: Sets the color for bullish inversion zones (former bearish gaps).
• Bearish IFVG: Sets the color for bearish inversion zones (former bullish gaps).
• Threshold %: The minimum percentage size required for a gap to be identified and tracked, helping filter out insignificant price noise.
• Lookback Period: Defines the number of bars the script scans to find and maintain active gaps on the chart.
• Extend Bars: Determines how many bars into the future a zone should be extended after it has been "broken" or inverted.

FAQ

How do I use the IFVG zones for entries?

IFVG zones are typically used as high-probability areas for price retracements. Traders often look for price to return to these "flipped" zones to confirm support or resistance before entering a trade in the direction of the inversion.

Can I receive notifications when a gap is inverted?

Yes, the indicator includes built-in alert conditions for both the creation of new FVGs and the moment an FVG is broken to become an Inversion Fair Value Gap.

How can I access ICT Inversion Fair value Gap (IFVG)?

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