ICT Fair Value Gap
Detects ICT Fair Value Gaps using a 3-candle pattern: a strong displacement candle (>1.5x ATR) leaves a gap between candle 1 high and candle 3 low. Price often returns to fill these gaps, making them high-probability entry zones for continuation or reversal trades.
What is this scanner?
The ICT Fair Value Gap scanner detects price imbalances left by strong displacement candles — gaps between the high of one candle and the low of a candle two positions later. According to ICT methodology, these gaps represent inefficiencies in price that the market tends to revisit and fill.
When price dislocates violently (the displacement candle is >1.5x ATR), it often leaves behind unfilled orders. Smart money uses these gaps as reference points, and price frequently returns to them before continuing. The scanner identifies fresh, unfilled gaps as high-probability entry zones.
Origin & History
ICT — Inner Circle Trader — is the trading persona of Michael J. Huddleston, who built a massive following from 2012 onward teaching institutional order flow concepts. His Fair Value Gap concept draws on the same underlying idea as Japanese Zankou (gap theory) and traditional imbalance analysis in order flow trading.
The core insight is that strongly directional moves leave behind unfilled buy or sell orders. Banks and institutions that missed the initial move will often wait for price to retrace into the gap before adding. In crypto perps, where liquidity is concentrated and bots optimize entries, FVGs have become self-fulfilling reference points that thousands of traders now watch simultaneously.
Detection Criteria
Displacement Candle
The middle candle of the 3-candle pattern must be >1.5x the 14-period ATR, confirming strong directional conviction rather than routine volatility.
Gap Measurement
For a bullish FVG: candle 3 low must be higher than candle 1 high, creating an untraded zone. For a bearish FVG: candle 3 high must be lower than candle 1 low.
Gap Freshness
The FVG must not have been filled (price must not have traded through it) since formation. Filled gaps lose their predictive value.
Timeframe Weight
FVGs on higher timeframes (4h, 1d) carry more weight than lower timeframe gaps. The scanner grades by timeframe, with 4h FVGs receiving higher scores.
Grading Breakdown
Large, unfilled 4h or daily FVG with the gap untested for 5+ candles, price currently at the gap, and multiple other scanners confirming the entry direction.
Clear FVG on 1h or 4h with price approaching the gap level after a healthy pullback. Volume is decreasing on the retracement (weak selling pressure).
Valid FVG identified but the gap is small relative to ATR, or price is approaching from a suboptimal angle. Worth monitoring for precise entry.
FVG exists but has been partially filled, or the displacement candle was barely above the ATR threshold. Lower probability setup.
Common Mistakes
Trading into a FVG without checking whether it has been previously tested. First tests are far more reliable than second or third tests.
Using FVGs as the only criteria for entry. They should be used as price targets or entry zones combined with a directional bias from the broader market.
Entering too early in the gap instead of waiting for the full gap fill. Price often sweeps through the entire gap before reversing.
Ignoring the displacement candle direction. Only trade bullish FVGs in uptrends and bearish FVGs in downtrends for highest probability.
How to Trade
Entry Context
Wait for price to retrace into the FVG zone, then enter as price shows rejection from the gap (a reversal candle with a wick into the gap). The most precise ICT entry is at the 50% level of the gap (Equilibrium).
Risk Management
Stop loss below the full gap (the bottom of a bullish FVG). If price trades through the entire gap without reversing, the setup is invalidated. Risk 1-2% of portfolio.
Target Framework
Target the swing high that created the displacement candle as the first objective. If the broader trend is strong, use 2x the gap size as a minimum expectation.
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