# Consequent Encroachment Consequent Encroachment is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®. Marks the consequent encroachment of every fair value gap (the 50% line of the imbalance) and optionally the midpoints of prominent candle wicks. Levels are tracked live: solid while respected, dashed once a close trades through, completed on a full fill or wick revisit, with the last 10 of each type kept by default. Eight alerts cover formation, tests, breaches and revisits. - Indicator in the LuxAlgo Library, by LuxAlgo, published Jun 20, 2026. - Access: free. - Concepts: [Consequent Encroachment](https://www.luxalgo.com/library/concept/consequent-encroachment/) (primary) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=xqu68mj0jvscy7pmyecu89jn - Page: https://www.luxalgo.com/library/indicator/consequent-encroachment/ **Consequent Encroachment** is the definitive clean build for [consequent encroachment](https://www.luxalgo.com/library/concept/consequent-encroachment/) levels: the 50% line of each fair value gap and, optionally, of a prominent candle wick. Each confirmed three-candle gap gets its midpoint drawn from the middle candle and tracked bar by bar (touched, closed through, or fully filled), while qualifying wicks contribute dotted midpoints of their own. Defaults keep the last 10 levels of each type. ## How to Trade the Consequent Encroachment? - **CE tested**: price touches a gap midpoint: half the imbalance has been rebalanced, the spot midpoint-based entries watch for a reaction. - **CE breached**: a close through the midpoint turns the line dashed; the gap no longer reads as respected and expectation shifts toward a full fill. - **Wick CE revisited**: price returns to a prominent wick's midpoint, the half-revisit that level anticipates, which completes it. Each event carries a bullish and a bearish alert, so the levels slot into a wider [Smart Money Concepts](https://www.luxalgo.com/library/family/smc-ict/) workflow without chart-watching. ## Consequent Encroachment Settings - **Minimum Gap Width** (default 0): ignores gaps under this multiple of the 14-period ATR; 0 marks every gap. - **Show Last** (default 10): levels kept per type, oldest removed first. - **Remove Completed CEs** (default on): deletes a level after a full fill or wick revisit; disable to keep it frozen and recolored. - **Wick Midpoints** (default on): also tracks the 50% line of prominent wicks. - **Minimum Wick %** (default 50): share of the candle range a wick must occupy; when both qualify, only the longer is used. - **Minimum Wick Size** (default 0): optional additional ATR filter on the wick's span. - Style inputs govern gap-zone shading, CE tags, line width and the bullish, bearish and completed colors. ## Frequently Asked Questions ### How does a CE differ from a balanced price range? A [balanced price range](https://www.luxalgo.com/library/indicator/balanced-price-range/) forms where opposing gaps overlap, leaving a two-sided zone repriced in both directions. A CE is a single line inside one imbalance, giving the zone an exact middle to judge reactions against. ### Why do candle wicks get the same treatment? The methodology reads a long wick as a one-candle inefficiency: an auction that traveled and snapped back inside a single bar. Its midpoint is watched for a reaction on the return, and unlike gap midpoints, a single revisit completes a wick level. ### What do the different line styles mean? Gap midpoints print solid and switch to dashed once a candle closes through them; wick midpoints print dotted from the start. With Remove Completed CEs disabled, finished levels stay on the chart in the completed shade. ## Related indicators - [Sweeps & IFVGs](https://www.luxalgo.com/library/indicator/sweeps-ifvgs/) (Inversion FVG): markdown at https://www.luxalgo.com/library/indicator/sweeps-ifvgs.md - [Significant Breakout Levels (FVG)](https://www.luxalgo.com/library/indicator/significant-breakout-levels-fvg/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/significant-breakout-levels-fvg.md - [AMD FVG Trade Setup](https://www.luxalgo.com/library/indicator/amd-fvg-trade-setup/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/amd-fvg-trade-setup.md - [FVG + Liquidity Sweep + CISD](https://www.luxalgo.com/library/indicator/fvg-liquidity-sweep-cisd/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/fvg-liquidity-sweep-cisd.md - [Session Sweep & iFVG RR](https://www.luxalgo.com/library/indicator/session-sweep-ifvg-rr/) (Inversion FVG): markdown at https://www.luxalgo.com/library/indicator/session-sweep-ifvg-rr.md - [Inversion Fair Value Gaps (IFVG)](https://www.luxalgo.com/library/indicator/inversion-fair-value-gaps-ifvg/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/inversion-fair-value-gaps-ifvg.md - [Fair Value Gap Absorption Indicator](https://www.luxalgo.com/library/indicator/fair-value-gap-absorption-indicator/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/fair-value-gap-absorption-indicator.md - [FVG Channel](https://www.luxalgo.com/library/indicator/fvg-channel/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/fvg-channel.md --- Source: https://www.luxalgo.com/library/indicator/consequent-encroachment/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/