A fair value gap represents a price-action inefficiency formed by rapid expansion. In the common three-candle model, the first candle high and third candle low do not overlap in a bullish displacement, leaving an inefficient area around the impulse candle.
Inefficiency Resolution Guide
Fair Value Gap
Indicator for
TradingView
Stop drawing random boxes. Master the exact science of 3-candle price displacement, stateful rebalance equilibrium, and mitigation depth with a unified market-structure workspace.
8 Min Read•Updated May 2026•Target: Price Action Specialists
THE FVG RETEST SANDBOX
Simulate Inefficiency Retests and Mitigations
Toggle displacement velocity and click different retest depths to observe how price rebalances market inefficiencies.
Fair Value Gap Simulator v2.6
SIMULATOR ACTIVE
GAP MONITOR STATE
Displacement velocity
HIGH SPEED SPONSORED PUSH
Mitigation depth
0.5 Equilibrium Tap
IIF Confluence Logic
SOMM: Fresh. High pressure buying.
Confluence trade
Execution Trigger
1. Select Displacement Velocity
2. Select Retest Depth (If FVG Active)
THEORY & REBALANCE DYNAMICS
The 0.5 Equilibrium Rebalance
Many FVG workflows watch the midpoint of the displacement inefficiency as a useful reference. Returning toward 50% can rebalance part of the move, but the next read still depends on structure, pressure, and follow-through.
- Triggers reaction on first tap if CVMI indicates high buying velocity.
CONFLUENCE BENEFITS
Filter out the clutter
Rather than plotting countless boxes, the Institutional Imbalance Framework filters gaps dynamically using CVMI momentum and range expansion context. You only study Gaps that represent real institutional draw on liquidity.
CONFLUENCE STRATEGY
Filter Gaps by Location, Speed, and Structure
Real edge in FVG trading doesn't come from finding a three-candle pattern. It comes from knowing which gaps hold structural relevance.
01
Displacement Quality
A high-velocity squeeze leg creates a clear, expanded candle length. If displacement is weak or drifts slowly, exclude the gap from your study.
Squeeze Leg Signature
02
Stateful Mitigations
Do not keep filled rectangles on your screen. Tracking gaps as fresh, tapped, or fully mitigated ensures you make clean, high-fidelity choices.
Resolution State
03
Protected swing bounds
A stronger gap should be backed by a protected swing high or low. Invalidation can be framed around those structural boundaries instead of around the rectangle alone.
Invalidation Rules
04
Dynamic Webhook alerts
Reduce manual gap scanning. Route stronger rebalance candidates through state-aware webhook alerts for review and downstream automation workflows.
Execution Automation
GAP RESOLUTION MATRIX
Isolated FVG Drawing vs. Confluence Filtering
See how IIF's integrated, stateful approach keeps FVG decisions tied to structure and mitigation state.
| Imbalance feature | Standard FVG Scripts | Institutional Imbalance Framework (IIF) |
|---|---|---|
| Leg filtering | Draws every three-candle gap regardless of velocity or range. Huge visual clutter. | Filters leg strength using CVMI volume and speed registers. Only sponsored expansion is drawn. |
| Mitigation state | Binary (Open or Closed). No memory of partial rebalances or depth. | Tracks exact state: Fresh, Tapped (0.5 Equilibrium), Resolved (Fully filled), or Swept. |
| Confluence validation | Treats all gaps equally. No integration with order blocks or liquidity. | Correlates gap retest with SOMM OB absorption and Liquidity Matrix stop runs. |
CONFLUENCE FAQS
Technical Answers for Smart Money Traders
These Q&As address technical category queries cleanly and directly.
Most gaps are noise. Stronger FVG candidates usually combine meaningful displacement, higher-timeframe market-structure context, and proximity to active order blocks or liquidity areas. The gap is the starting point, not the full decision.
A standard free indicator draws countless rectangles that clutter your chart. A premium tool like the Alien Algorithms Institutional Imbalance Framework tracks FVG states: Fresh (unrevisited), Tapped (partially mitigated), Resolved (fully rebalanced), or Retired (trend shift).
Unified Confluence System
Filter Fair Value Gaps with
Institutional Precision
Stop chasing random empty boxes. Experience dynamic CVMI pressure, SOMM stateful lifecycles, and the Liquidity Matrix combined into one high-performance TradingView indicator workspace.
Spot, Futures, CFDs
Feeds Synced
3 in 1 Workspace
Confluence Indicators
JSON Automated
Webhook Alerting
Premium Flagship
Access Tier