ICT Fair Value Gap

The ICT Fair Value Gap indicator identifies and highlights price imbalances on the chart to assist traders in spotting potential areas of institutional interest and market inefficiency. By automating the detection of these three-candle patterns, the tool helps train the eye to recognize gaps where price action may return to seek liquidity or rebalance.

Usage

The script automatically plots boxes on the chart whenever a Fair Value Gap (FVG) is detected. A bullish FVG occurs when the low of the third candle is higher than the high of the first candle, while a bearish FVG occurs when the high of the third candle is lower than the low of the first candle.

Traders can use these highlighted zones as potential entry points, targets, or areas of support and resistance. The script includes a volatility filter to ensure that only gaps occurring during significant price movements are displayed. Additionally, the "Shrink" feature provides a visual representation of how much of a gap has been filled by subsequent price action; if a gap is completely filled, the box can be set to disappear or trigger an alert.

Details

A Fair Value Gap is a concept popularized by Inner Circle Trader (ICT) that represents an imbalance between buying and selling pressure. This implementation specifically looks for a three-candle sequence where the middle candle exhibits high volatility (determined by an ATR-based multiplier). The gap is defined by the distance between the high of the first candle and the low of the third candle (in a bullish scenario) or vice versa (in a bearish scenario).

Settings

General Settings

• ATR MA length: The lookback period used to calculate the Average True Range for the volatility filter.
• ATR multiplier: The factor applied to the ATR to determine if the middle candle of the FVG has sufficient range to be considered a significant imbalance.

Box Settings

• Box count: The maximum number of active FVG boxes to display on the chart at one time.
• Up candle box color: The color used for bullish Fair Value Gaps.
• Down candle box color: The color used for bearish Fair Value Gaps.
• Shrink where PA touches: When enabled, the box dimensions will dynamically adjust as price enters the gap. If price moves entirely through the gap, the box is deleted.

FAQ

How do I access ICT Fair Value Gap?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Can I set alerts for when a gap is filled?

Yes, the script includes built-in alert functionality that triggers when an FVG box is fully closed or when a new FVG is formed.

Why are some gaps not showing up?

The indicator uses a volatility condition. If the middle candle's range is not greater than the ATR multiplied by your setting, the gap will be filtered out to avoid noise.