Fair Value Gaps Mitigation Oscillator
By LuxAlgoMar 5, 2024
Fair Value Gaps Mitigation Oscillator condenses the state of recent fair value gaps into a single normalized line. Instead of boxing imbalances on the price panel, it tracks a user-defined number of bullish and bearish gaps, measures how much of each remains unfilled, and scales the running total between +1 and -1, a direct reading of whether the market is defending its imbalances or repairing them.
How to Trade the Fair Value Gaps Mitigation Oscillator?
- Sustained high values: bullish gap area is staying open. Demand keeps lifting price away from its inefficiencies, typical of a robust uptrend.
- Deep negative values: bearish gaps dominate and remain unfilled, the signature of an intensifying downtrend.
- Readings near +1 or -1: the entire lookback is either fully unmitigated in one direction or entirely mitigated in the opposite one: one-sided conditions at their most stretched.
- Histogram bars: each new gap prints a bar sized as its share of total outstanding gap width, with a 50% hash mark for reference. An outsized bar means a single displacement now dominates the picture.
Mitigation starts when price closes over, under, or within a gap, and the total falls by the mitigated percentage. Reading the line alongside the standard FVG behavior rules helps separate continuation conditions from a market busy repairing itself.
Fair Value Gaps Mitigation Oscillator Settings
- FVG Lookback: how many bullish and bearish gap pairs stay in memory. Raise it to profile longer-term trend structure; lower it for a faster, more local read of gap behavior.
Frequently Asked Questions
Free on Vela
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- Up to 500 strategy alerts, with webhook automation
- Up to 10× the chart history of Free
- Orderflow lookback up to full history
- Up to 100,000 monthly credits for Quant to customize it
- Futures data alongside crypto, stocks, forex and commodities
Also works on
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