Fair Value Gap with alerts

Fair Value Gaps (FVGs) are price imbalances that occur when a strong directional move creates a gap between the wicks of three consecutive candles. Specifically, an FVG forms when the wick of the first candle doesn't overlap with the wick of the third candle, leaving an area of inefficient price delivery. These gaps often emerge during periods of high volatility, when aggressive buying or selling pressure overwhelms one side of the market and drives price rapidly in a single direction.

Many traders view FVGs as areas where the market may seek to rebalance. As a result, price frequently revisits these zones before continuing its prevailing trend, causing FVGs to act as potential magnets for future price action. This tendency makes them valuable areas for identifying potential entries, exits, and retracement opportunities.

While FVGs can provide valuable insight into market structure, liquidity, and institutional order flow, they should not be regarded as foolproof trading opportunities. Like any technical analysis tool, FVGs are most effective when combined with other forms of analysis, such as market structure, liquidity levels, support and resistance, and volume-based indicators.

Features

• Sends an alert when price has reached a FVG zone
• The zones have 2 colors (adjustable by input). Dark color for untested FVG and light color for tested or broken FVG
• The price of the FVG outer border as well as the amount of zone test are written at each FVG
• The indicator can write the signals to global variables which can be used by an Expert Advisor for auto trading