SMC Structures and FVG

The SMC Structures and FVG indicator provides an automated framework for identifying market structure shifts and liquidity gaps based on Smart Money Concepts. By detecting trend continuations (Break of Structure), reversals (Change of Character), and Fair Value Gaps (FVG), it helps traders visualize institutional order flow and potential zones of interest.

Usage

The indicator automatically plots key structural levels and liquidity imbalances on the chart. It can be used across various timeframes to determine the prevailing trend and locate areas where price may react or retrace.

Market Structure

• BOS (Break of Structure): Displayed as horizontal lines when the price continues the existing trend. Bullish breaks occur when price surpasses a structural high, while bearish breaks occur when price drops below a structural low.
• CHoCH (Change of Character): Displayed as horizontal lines when the price signals a potential trend reversal by breaking the opposing structural level.
• Current Structure: High and low boundaries of the active trading range are highlighted to show the "internal" environment price is currently moving within.

Fair Value Gaps (FVG) FVGs highlight areas of price imbalance where market participants may expect future mitigation.

• Bullish FVG (Green): Formed during an upward move when the low of the third candle is higher than the high of the first candle.
• Bearish FVG (Red): Formed during a downward move when the high of the third candle is lower than the low of the first candle.
• Mitigation (Gray): When price partially retraces into an FVG, the box changes color to signal it has been tested.
• Removal: Once an FVG is fully mitigated (price moves entirely through the gap), the box is removed from the chart to maintain clarity.

Details

The script utilizes a lookback mechanism to identify swing highs and lows, which form the basis for structure labeling. Users can choose whether structural breaks are confirmed by candle wicks or candle bodies through the settings.

The FVG logic identifies three-candle sequences where a gap exists between the first and third candles. The indicator tracks these zones in real-time, updating their status based on price action. Additionally, the tool includes integrated Fibonacci levels that automatically project from the current structural high and low, providing a "premium vs. discount" view of the trading range.

Settings

Fair Value Gap

• Display FVG: Toggles the visibility of all Fair Value Gaps.
• Bullish/Bearish/Mitigated FVG Color: Customizes the colors for different FVG states.
• Number of FVG to show: Limits the historical FVG count on the chart to reduce clutter.
• Reduce mitigated FVG: When enabled, the FVG box shrinks dynamically as price mitigates the gap.

Structures

• Break with candle's body: If enabled, structure breaks are only confirmed if a candle body closes past the level. If disabled, a wick touch is sufficient.
• Display current structure: Toggles the visibility of the current range high and low lines.
• BOS/CHoCH Styles: Allows customization of colors, line styles (solid, dotted, dashed), and line widths for structure breaks.
• Number of break to show: Controls the history of structural labels displayed on the chart.

Structure Fibonacci

• Fibo 1–5: Each level (defaulting to 0.786, 0.705, 0.618, 0.5, and 0.382) can be toggled individually.
• Value/Color/Style: Users can define the specific Fibonacci ratios and the visual appearance of the horizontal projection lines.

FAQ

How do I interpret a mitigated FVG? A mitigated FVG (gray) indicates that price has returned to that imbalance zone. While it may still hold some liquidity, a fully mitigated FVG is removed because the imbalance has been "filled."

What is the difference between BOS and CHoCH in this script? A BOS (Break of Structure) follows the direction of the current trend (e.g., a higher high in an uptrend). A CHoCH (Change of Character) is the first sign of a reversal (e.g., price breaking a higher low in an uptrend).

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