# Fair Value Gaps

## Overview

The **Fair Value Gaps (FVG)** feature is a powerful tool that automatically detects and displays price imbalances on your chart. These gaps occur when there is a strong, one-sided move in the market, leaving behind an inefficient price area that often acts as a magnet for future price action. FVGs are critical levels to watch as they frequently serve as high-probability support or resistance zones where reversals can occur.

The indicator uses an advanced algorithm that analyzes price action across three candles to identify these imbalances. It also includes a **Quality Filter** that leverages volume and order flow (delta) analysis to ensure only the most significant, high-confidence gaps are displayed.

Additionally, the tool features advanced logic for **Mitigation** (when price returns to fill the gap) and can automatically identify **Inverse Fair Value Gaps**, which are created when a previous FVG is broken and flips its role (e.g., a bullish FVG becomes a new resistance area).

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## Settings

You can customize the Fair Value Gaps detection to fit your analysis style, with options for multi-timeframe analysis and advanced visual filtering.

| Setting                     | Description                                                                                                                                                                            |
| --------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Fair Value Gaps 1 & 2**   | Enables and configures up to two different timeframes for FVG detection, allowing for powerful multi-timeframe analysis.                                                               |
| **Mitigation Mode**         | Controls how FVGs are handled when price interacts with them. Close removes the FVG when price closes through it, while Reduce will shrink the zone as it gets filled.                 |
| **Inverse Fair Value Gaps** | When enabled, the indicator will automatically convert a mitigated (broken) FVG into an "Inverse FVG," which often acts as a new support or resistance level.                          |
| **Extend Box**              | When enabled, FVG boxes will automatically extend to the current bar until they are mitigated. You can set the Maximum Extension Periods to control how long they remain on the chart. |
| **Quality Filter**          | Enables a quality filter to remove lower-probability FVGs. You can set the Quality Filter Level to control how strict the filtering is based on volume and order flow.                 |
| **Key Level**               | Displays a key price level within each FVG, which is always set to the midpoint (50%) of the gap.                                                                                      |
| **Adaptive Transparency**   | When enabled, the transparency of the FVG boxes will dynamically adjust based on their significance. More significant gaps will appear more solid and less transparent.                |
| **Show Text / Text Color**  | Controls the display, size, and color of the text labels within the FVG boxes.                                                                                                         |

## Best Practices & Usage

* **Identify High-Probability Reversal Zones:** Fair Value Gaps are excellent for spotting potential turning points in the market. Look for buying opportunities as price retraces into a bullish (up-side) FVG, and selling opportunities as price moves into a bearish (down-side) FVG.
* **Use Multiple Timeframes for Confirmation:** For higher-confidence setups, enable both **Fair Value Gaps 1** and **Fair Value Gaps 2** on different timeframes. A confluence of FVGs from multiple timeframes at the same price level represents a very strong support or resistance zone.
* **Filter for Quality:** It is highly recommended to keep the **Quality Filter** enabled with a level of 3 or higher. This will help you filter out weaker, less reliable gaps and focus only on the most significant areas of price imbalance.
* **Watch for Inverse FVGs:** An **Inverse Fair Value Gap** is a powerful reversal signal. When a support (bullish) FVG is broken and flips to become resistance, it often provides a high-probability entry for a continued move down, and vice-versa for a broken supply FVG.


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