Understanding ICT Implied Fair Value Gap (IFVG)
In this article, we’ll explore the concept of ICT Implied Fair Value Gap (IFVG). By the end, you’ll know how to spot and trade IFVGs like a pro. For more detailed information, check out the ICT Implied Fair Value Gap PDF on our website.
What is ICT Implied Fair Value Gap (IFVG)?
The ICT Implied Fair Value Gap (IFVG) is a hidden type of fair value gap. Unlike typical gaps that are visible, IFVGs are identified through large candlesticks and displacement moves. They occur when a price move creates large candlesticks where the wicks overlap each other, leaving no obvious gap.
How to Identify ICT Implied Fair Value Gap (IFVG)
- Bullish IFVG:
- Look for a large bullish candlestick whose body is covered by the wicks of the candles before and after it.
- Use the Fibonacci tool to find the 50% level of the upper wick of the previous candle and the lower wick of the next candle.
- The space between these two levels is your Bullish Implied Fair Value Gap.
- Bearish IFVG:
- Find a large bearish candlestick whose body is covered by the wicks of the candles before and after it.
- Measure the 50% level of the lower wick of the previous candle and the upper wick of the next candle with the Fibonacci tool.
- The space between these two levels is your Bearish Implied Fair Value Gap.
How to Trade ICT Implied Fair Value Gap (IFVG)
- Identify Market Trend: Determine if the market is bullish or bearish. You can use tools like the ICT Daily Bias Trick for this.
- Confirm the Trend: In a bullish market, wait for the price to touch a higher time-frame PD Array and look for a market structure shift on a lower time-frame.
- Find a Large Candle: Look for a significant candlestick. In a bullish trend, it should be a strong bullish candle, and in a bearish trend, a large bearish candle.
- Check Surrounding Candles: Ensure the candles before and after your large candle have wicks that overlap its body. This confirms the implied fair value gap.
- Mark the IFVG: Use the Fibonacci tool to mark the Implied Fair Value Gap. When the price comes back to this area, it may be time to trade.
For a detailed guide, download the ICT Implied Fair Value Gap PDF from our website or view it on Trading View.
