KABOOM FVG

Fair value gaps (FVG) highlight imbalances areas between market participants and have become popular amongst technical analysts. The following script aims to display fair value gaps alongside the percentage of filled gaps and the average duration (in bars) before gaps are filled.

Users can be alerted when an FVG is filled using the alerts built into this script.

In practice, FVG's highlight areas of support (bullish FVG) and resistances (bearish FVG). Once a gap is filled, suggesting the end of the imbalance, we can expect the price to reverse.

🔶 USAGE

This approach is more contrarian in nature, users wishing to use a more trend-following approach can use the identification of FVG as direct signals, going long with the identification of a bullish FVG, and short with a bearish FVG.

Bullish FVG

low > high(t-2)
close(t-1) > high(t-2)
(low - high(t-2)) / high(t-2) > threshold


Upper Bullish FVG = low
Lower Bullish FVG = high(t-2)

Bearish FVG

high < low(t-2)
close(t-1) < low(t-2)
(low(t-2) - high) / high < -threshold


Upper Bearish FVG = low(t-2)
Lower Bearish FVG = high

🔶 SETTINGS

Threshold %: Threshold percentage used to filter our FVG's based on their height.
Auto Threshold: Use the cumulative mean of relative FVG heights as threshold.
Unmitigatted Levels: Extent the mitigation level of the number of unmitigated FVG's set by the user.
Mitigation Levels: Show the mitigation levels of mitigated FVG's.
Timeframe : Timeframe of the price data used to detect FVG's.