FVG Zones with Signals

The FVG Zones with Signals indicator identifies Fair Value Gaps (FVG) and visualizes them as customizable zones to highlight market imbalances and potential trading opportunities.

Usage

The tool is primarily used by price action and market structure traders to locate areas where price may return to "fill" a gap. By highlighting these imbalances, users can anticipate retests or breakouts.

• Breakout Trading: When price closes outside an active FVG zone, a "Break" signal is generated. A green triangle below the bar indicates a breakout above a bearish FVG, suggesting bullish momentum. Conversely, a red triangle above the bar indicates a breakout below a bullish FVG.
• Retest/Exit Trading: "Exit" signals (circles) appear when price leaves an FVG zone without a full breakout. These can indicate the end of a correction or a potential reversal when aligned with the broader trend.
• Support & Resistance: Bullish FVGs often act as dynamic support, while bearish FVGs act as dynamic resistance. Users can look for price reactions at the 50% midline to gauge the strength of the zone.

Details

Fair Value Gaps represent areas where price moved so quickly that an imbalance was created, leaving unexecuted orders. This indicator uses a size filter based on a multiplier of the average candle body size to ensure only significant gaps are displayed.

• Historical Initialization: The script automatically scans the last 500 candles upon loading to plot historical zones.
• Zone Management: To maintain chart clarity, zones are automatically removed once they are broken by price or exceed a 500-candle lookback limit.
• Imbalance Logic: Larger gaps (higher multiplier) typically represent deeper imbalances and have a higher probability of being retested as the market seeks liquidity.

Settings

FVG Size Filter

• Candle Size Period: The number of bars used to calculate the average candle body size for filtering.
• FVG Size Multiplier: Determines the minimum size required for a gap to be identified; higher values result in fewer, more significant zones.

Box Style

• Transparency: Adjusts the visibility of the FVG box background.
• Middle Line Transparency: Controls the visibility of the 50% FVG midline.

Bull/Bear Box Style

• Border Color/Gradient: Customizes the visual appearance of bullish and bearish zones.
• Border Width/Style: Options for solid, dashed, or dotted borders to match chart aesthetics.

Signal Settings

• Signal Type: Choose to display "Break" signals, "Exit" signals, or "Both".
• Signal Colors: Customizes the colors for upward and downward triangles and circles.

FAQ

How do I interpret the different signal shapes? Triangles represent "Break" signals where price has fully breached a zone, while circles represent "Exit" signals where price has left a zone without necessarily breaking through the opposite side.

Why are some Fair Value Gaps not appearing on my chart? If a gap is smaller than the product of the average candle body and the "FVG Size Multiplier," it will be filtered out. Try lowering the multiplier to see more zones.

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