ICT Implied Fair Value Gap (IFVG)
By LuxAlgoFeb 22, 2023238 chart adds
ICT Implied Fair Value Gap (IFVG) is an indicator on Vela, our next-generation charting platform, written in Pine Script®.
ICT Implied Fair Value Gap (IFVG) auto-detects the implied fair value gap: a three-candle pattern whose oversized central body and pronounced flanking shadows betray an imbalance that never shows up as actual empty space on the chart. Where standard fair value gaps are read straight off candle extremes, the implied version is measured from the average of the two adjacent candles' shadows, and this build can extend that average forward until the next equivalent formation appears, turning every detection into a dynamic support or resistance level.
How to Trade the ICT Implied Fair Value Gap (IFVG)?
- Bullish IFVG: the highlighted zone gives returning price a place to find support, a reference area for planning longs.
- Bearish IFVG: within a downtrend the zone acts as potential resistance, framing short entries on the retest.
- Extended averages: with the average projected forward, older IFVGs become longer-term support/resistance lines that stay live until a new formation replaces them.
Detection is rule-based on both sides: the central candle body must exceed its neighbors, the wicks of the first and third candles must overlap, so no regular gap exists, and both flanking shadows must exceed a user-set percentage of the latest candle's range.
ICT Implied Fair Value Gap (IFVG) Settings
- Shadow Threshold %: the minimum size of each flanking shadow as a percentage of the latest candle's range (default 30). Raise it to keep only the most pronounced imbalances; lower it to catch more formations.
- IFVG Extension: how many bars each highlighted area extends to the right of its formation.
- Extend Averages: keeps projecting a zone's average until the next corresponding IFVG is detected, the option to enable for longer-term support/resistance work.
Frequently Asked Questions
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