# FVG Trailing Stop

FVG Trailing Stop is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®.

A trend-following trailing stop derived from the extremes of unmitigated fair value gaps, averaged per direction and smoothed with a simple moving average. Price above the line reads bullish, below reads bearish, and an optional Reset on Cross mode steps aside during unclear phases. For traders who anchor exits to imbalances, not fixed distances.

- Indicator in the LuxAlgo Library, by LuxAlgo, published Jun 4, 2025.
- Access: free.
- Concepts: [Fair Value Gap](https://www.luxalgo.com/library/concept/fair-value-gap/) (primary), [Trailing Method Taxonomy](https://www.luxalgo.com/library/concept/trailing-method-taxonomy/)
- Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=cmpwn1szf002hvhsg8fe6shnw
- Page: https://www.luxalgo.com/library/indicator/fvg-trailing-stop/

The **FVG Trailing Stop** turns unfilled imbalances into an adaptive exit line. Every new [FVG](https://www.luxalgo.com/library/concept/fair-value-gap/) contributes the extremity farthest from price (the bottom of an upward gap, the top of a downward one) and a fixed number of these unmitigated levels are averaged per direction, then smoothed into a trailing stop that follows the trend.

## How to Trade the FVG Trailing Stop?

- **Price above the trailing stop**: bearish gaps have been mitigated and conditions read as an uptrend.
- **Price below the trailing stop**: bullish gaps have been mitigated; the read flips bearish.
- **Stop touched, average respected**: the more transparent directional average underneath holds as support or resistance, a continuation scenario.
- **Stop touched, average crossed**: the trend does not shift until price crosses that secondary average; when it does, treat it as a potential reversal.
- **Reset on Cross enabled**: a crossed stop disappears into a neutral state and reprints once price resumes its prior direction, a clean cue for re-entries and a filter against false flips.

Among [trailing methods](https://www.luxalgo.com/library/concept/trailing-method-taxonomy/), this one is unusual for anchoring to structure: the level moves because gaps get filled, not because price traveled some fixed distance. Once a gap is mitigated it drops out of the calculation and a newer one takes its place, keeping the stop responsive yet smooth.

## FVG Trailing Stop Settings

- **Unmitigated FVG Lookback**: how many unmitigated gaps feed the calculation; more gaps produce a steadier, more stable stop.
- **Smoothing Length**: the simple moving average applied to the raw averages; longer smoothing cuts noise but delays signals.
- **Reset on Cross**: enables the neutral state that hides the stop when crossed and redraws it once the trend resumes.

## Frequently Asked Questions

### How is this different from an ATR-based trailing stop?

Distance-based stops trail price by a volatility offset regardless of what structure did. The FVG Trailing Stop reacts to how imbalances are being filled, so its level reflects where unfilled gaps actually sit rather than a fixed buffer behind price.

### What pairs well with it?

It combines cleanly with volume analysis, order block tools, and momentum studies for confluence. The [FVG Positioning Average](https://www.luxalgo.com/library/indicator/fvg-positioning-average/) is a natural companion, plotting where recent gaps initiated so you can judge whether a stop flip has real positioning at its back.

### How do I access the FVG Trailing Stop?

It comes free with the LuxAlgo Library, no plan required. Grab it from this page and combine it with the entry tools you already rely on. You can also copy the source code from this page and run it anywhere Pine Script® runs.

## Related indicators

- [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
- [Fair Value Gaps Mitigation Oscillator](https://www.luxalgo.com/library/indicator/fair-value-gaps-mitigation-oscillator/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/fair-value-gaps-mitigation-oscillator.md
- [Breakaway Fair Value Gaps](https://www.luxalgo.com/library/indicator/breakaway-fair-value-gaps/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/breakaway-fair-value-gaps.md
- [HTF Fair Value Gap](https://www.luxalgo.com/library/indicator/htf-fair-value-gap/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/htf-fair-value-gap.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
- [ICT Implied Fair Value Gap (IFVG)](https://www.luxalgo.com/library/indicator/ict-implied-fair-value-gap-ifvg/) (Fair Value Gap): markdown at https://www.luxalgo.com/library/indicator/ict-implied-fair-value-gap-ifvg.md
- [Signals & Overlays](https://www.luxalgo.com/library/indicator/luxalgo-signals-overlays/) (Trailing Method Taxonomy): markdown at https://www.luxalgo.com/library/indicator/luxalgo-signals-overlays.md
- [Fibonacci Trailing Stop](https://www.luxalgo.com/library/indicator/fibonacci-trailing-stop/) (Trailing Method Taxonomy): markdown at https://www.luxalgo.com/library/indicator/fibonacci-trailing-stop.md

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Source: https://www.luxalgo.com/library/indicator/fvg-trailing-stop/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/