Volumized Fair Value Gaps

The Volumized Fair Value Gaps indicator identifies traditional price imbalances while integrating volumetric analysis to display the total trading volume and the ratio of bullish to bearish activity within each gap. This tool helps traders assess the strength of Fair Value Gaps (FVG) and identify high-conviction zones for potential support or resistance.

Usage

The indicator automatically highlights FVG zones on the chart. Unlike standard FVG tools, this script provides a volumetric breakdown for every detected zone:

• Volumetric Analysis: Each FVG box displays the total volume transacted within that price range.
• Bull/Bear Ratio: A visual ratio bar or percentage indicates the balance between buying and selling volume, helping to identify if a gap was formed with aggressive participation.
• Zone Invalidation: Traders can choose whether a zone is considered invalidated (closed) when the price touches it with a wick or only when a bar closes through it.
• Historical Analysis: By enabling "Show Historic Zones," users can study how past gaps reacted to price even after being filled.

Details

The script utilizes a multi-bar detection algorithm to identify imbalances. It goes beyond simple price action by aggregating volume data specifically for the bars that form the gap. To ensure chart clarity, the indicator includes a "Combine Zones" feature that merges overlapping imbalances into a single unified volumetric area. The "Detection Sensitivity" setting adjusts the required magnitude of the gap relative to historical price action, allowing for the filtering of minor noise.

Settings

General Configuration

• Zone Invalidation: Determines if a zone is invalidated by a Wick or a Close.
• Zone Filtering: Select between "Average Range" (compares FVG size to recent ATR) or "Volume Threshold" (filters based on total volume).
• FVG Detection: Choose "Same Type" (all 3 bars must be the same direction) or "All" (allows mixed bar directions).
• Detection Sensitivity: Adjusts the threshold for gap detection (Low, Normal, High, Extreme).
• Show Historic Zones: Toggles the visibility of invalidated FVG zones.

Style

• Bull/Bear Color: Customizes the colors for bullish and bearish imbalance zones.
• Start Zones From: Sets whether the volume visual starts from the "First Bar" of the gap or the "Last Bar."

FAQ

How do I interpret the percentage shown on the FVG? The percentage represents the ratio of the dominant volume type (bullish or bearish) relative to the total volume within that specific gap.

What is the difference between sensitivity levels? Lower sensitivity focuses on larger, more significant gaps, while higher sensitivity levels will detect smaller, more frequent imbalances.

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