Inversion Fair Value Gaps (IFVG)

The Inversion Fair Value Gaps (IFVG) indicator provides a sophisticated approach to Smart Money Concepts (SMC) by tracking institutional liquidity gaps and their subsequent structural shifts. This tool identifies standard Fair Value Gaps (FVG) and monitors their "Inversion"—a state where failed supply zones flip into demand or failed demand zones flip into supply.

Usage

The Usage section focuses on identifying institutional sentiment shifts through FVG evolution. When a price action completely breaches an existing FVG, the zone is "inverted," suggesting a change in market bias.

• Bullish Inversion: Occurs when a Bearish FVG is broken to the upside, transforming the zone into a potential support level (marked with a yellow dotted border).
• Bearish Inversion: Occurs when a Bullish FVG is broken to the downside, transforming the zone into a potential resistance level (marked with a yellow dotted border).
• Retest Signals: The indicator plots triangle shapes when price returns to touch a confirmed inversion zone. A triangle up below the bar suggests a retest of support, while a triangle down above the bar suggests a retest of resistance.
• Filtering: Users can choose to display only bullish setups, bearish setups, or both, and can further filter gaps based on the percentage of candle displacement.

Details

The script implements strict ICT-style invalidation logic to maintain chart clarity. Unlike "Zombie Zones" that clutter historical charts, this indicator removes levels based on specific price action rules:

• Support IFVG Invalidation: If price closes back below the bottom of a bullish inversion zone, the level is considered failed and is removed from the chart.
• Resistance IFVG Invalidation: If price closes back above the top of a bearish inversion zone, the level is removed.
• Longevity Retirement: To preserve performance and focus on recent data, active zones that exceed a user-defined bar limit are automatically shrunk into 5-bar historical markers.

Settings

Filters

• Display Mode: Determines whether to show Bullish Only, Bearish Only, or both types of Fair Value Gaps.
• Min Candle Size (%): Sets the minimum percentage move required for a candle to be considered a valid displacement move for FVG creation.
• Max Zone Longevity (Bars): Defines the number of bars an unfilled zone remains active before being retired to a small historical marker.

Analysis

• Show Only Inversion Zones: If enabled, standard displacement gaps remain hidden until they are breached and flipped into an Inversion FVG (IFVG).

Style

• Bullish FVG Color: Customizes the background color for bullish displacement zones.
• Bearish FVG Color: Customizes the background color for bearish displacement zones.
• Inversion Border: Sets the color for the dotted border used to highlight inverted zones.

FAQ

How do I interpret the text inside the FVG boxes? The text displayed inside each FVG box represents the institutional volume associated with the displacement candle that created the gap, helping you gauge the strength of the move.

What causes a zone to disappear from my chart? Zones are removed if the price action "re-breaches" the level in the opposite direction of the inversion bias, or if the zone exceeds the maximum longevity setting.

How can I access the Inversion Fair Value Gaps (IFVG) tool? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.