MTF Fair Value Gap v2

The MTF Fair Value Gap indicator tool identifies and displays Fair Value Gaps (FVG) from both the current and higher timeframes to help traders identify areas of institutional inefficiency and potential price targets.

Usage

The indicator can be used to spot liquidity imbalances across different timeframes. Users can load multiple instances to track the current chart's FVGs alongside higher timeframe gaps, which often serve as more significant points of interest for trend bias or internal liquidity targets.

When price enters a highlighted FVG box, it is considered "mitigated." The script allows users to either remove these boxes entirely or change their visual appearance to distinguish active gaps from filled ones.

Details

Fair Value Gaps occur within a three-candle sequence when there is a gap between the first candle's wick and the third candle's wick, suggesting a rapid price movement where orders were not fully filled. This script utilizes arrays to manage up to 500 boxes and lines, ensuring efficient performance while tracking historical gaps. The "True To Size" logic calculates the appropriate bar width for MTF gaps to ensure they reflect the actual duration of the timeframe they represent on the chart.

Settings

General

• Timeframe: Defines the timeframe for FVG calculation (e.g., current chart or a specific higher timeframe).
• Shift: Adjusts the horizontal placement of the gap boxes.
• Delete Mitigated: When enabled, the indicator removes FVG boxes once they have been touched by price.
• Extend Current: Extends active gaps to the right side of the chart until they are mitigated.
• True To Size: Adjusts the width of the boxes based on the relationship between the input timeframe and the chart timeframe.

Bull FVG

• Show Bull FVG: Toggles the visibility of bullish fair value gaps.
• Mitigated Style: Changes the color/style of the box once price has entered the gap.
• Colors: Customize the line and box colors for both active and mitigated bullish gaps.

Bear FVG

• Show Bear FVG: Toggles the visibility of bearish fair value gaps.
• Mitigated Style: Changes the color/style of the box once price has entered the gap.
• Colors: Customize the line and box colors for both active and mitigated bearish gaps.

FAQ

How do I access MTF Fair Value Gap?

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

Can I see gaps from multiple timeframes at once?

Yes, you can apply the indicator multiple times to your chart, setting each instance to a different timeframe (e.g., 1H, 4H, and Daily).

What does "Mitigated" mean in this context?

A gap is considered mitigated when the price action returns to the gap's price range, effectively "filling" the imbalance left behind by the initial move.

Credits

Special thanks to @shanxia for the FVG array implementation logic.