The Fair Value Gap chart is a new charting method that displays fair value gap imbalances as Japanese candlesticks, allowing traders to quickly see the evolution of historical market imbalances.
The script is additionally able to compute an exponential moving average using the imbalances as input.
πΆ USAGE
The Fair Value Gap chart allows us to quickly display historical fair value gap imbalances. This also allows for filtering out potential noisy variations, showing more compact trends.
Most like other charting methods, we can draw trendlines/patterns from the displayed results, this can be helpful to potentially predict future imbalances locations.
Users can display an exponential moving average computed from the detected fvg's imbalances. Imbalances above the ema can be indicative of an uptrend, while imbalances under the ema are indicative of a downtrend.
Note that due to pinescript limitations a maximum of 500 lines can be displayed, as such displaying the EMA prevent candle wicks from being displayed.
πΆ DETAILS
πΉCandle Structure
The Fair Value Gap Chart is constructed by keeping a record of all detected fair value gaps on the chart. Each fvg is displayed as a candlestick, with the imbalance range representing the body of the candle, and the range of the imbalance interval being used for the wicks.
πΉEMA Source Input
The exponential moving average uses the imbalance range to get its input source, the extremity of the range used depends on whether the fvg is bullish or bearish.
When the fvg is bullish, the maximum of the imbalance range is used as ema input, else the minimum of the fvg imbalance is used.
Extremely clever, always exciting to see what your brilliant mind has thought of next )
NEKSUS_
β
Very interesting idea! Maybe it's possible to make a tooltip with date and time if you hover your mouse over the candle?
crypto_juju
β
Hi, so to confirm, is the FVG chart always 3x the timeframe that my regular chart is on? A bit confused as to when the FVG candles are formed but based on your snippet, I am assuming that 3 regular candles are needed in order to form 1 FVG candle. Or is that wrong thinking? Thanks and appreciate your work!
alexgrover
β
@crypto_juju, All the highlighted FVG's are from the user chart timeframe. The script does not highlight when the FVG's occurs, only a chart is built using a series of FVG's :)
"Some FVG's are dogs" π€£