Skip to main content

Fair Value Gaps (FVGs) with CVD

A Fair Value Gap (FVG) represents a market inefficiency created by imbalanced buying and selling pressures. These gaps act as price magnets, often drawing the market back to "fill" the gap before continuing its trend.

Fair Value Gap Trading Example

Understanding FVGs​

FVGs supported by key support and resistance levels offer high-probability trading opportunities. The indicator identifies two types of gaps:

  1. Standard FVGs

    • Market inefficiencies
    • Potential price magnets
    • Volume-confirmed setups

  2. Inverse FVGs (iFVGs)

    • Gaps closed by opposite movement
    • Strong trend continuation signals
    • Volume-validated patterns

Cumulative Volume Delta Integration​

FVG and iFVG Analysis

The integration of Cumulative Volume Delta (CVD) adds depth to FVG analysis by:

  • Measuring net buy/sell volume
  • Confirming market intent
  • Validating momentum strength

The integration of Cumulative Volume Delta (CVD) with Fair Value Gaps adds a new dimension to market analysis. By measuring the net difference between buying and selling volume within an FVG, traders gain deeper insight into market intent and strength. For example, an FVG with a high cumulative buy volume in an uptrend confirms the validity of the gap and indicates stronger upward momentum. Conversely, in a downtrend, an FVG with dominating sell volume supports the bearish bias. The FVG includes two bars on the left side, indicating the cumulative buy volume in green as well as the cumulative sell volume in red. At the right side of the FVG box the ratio of the cumulative buy/sell volume is displayed. A high ratio over 1, for example 1.5, indicates a lot of buying pressure. On the hand, a ratio far below 1, for example 0.66, indicates a lot of selling pressure. This feature not only helps traders validate FVGs but also allows them to anticipate price movement with greater accuracy.

Volume Ratio Analysis​

The FVG displays two key components:

  • Left side: Buy volume (green) and sell volume (red) bars
  • Right side: Buy/sell volume ratio

Volume ratio interpretation:

  • Ratio > 1 (e.g., 1.5): Strong buying pressure
  • Ratio < 1 (e.g., 0.66): Strong selling pressure

Multi-Timeframe Analysis​

Configure higher timeframe analysis through:

  1. Timeframe 1 settings (e.g., 4H)
  2. Timeframe 2 settings (e.g., 1D)
Pro Tip

Combine FVG analysis with Order Blocks for stronger trade confirmation.

FAQ​

Next Steps​

Explore Order Blocks

Learn how to combine FVGs with Order Blocks for stronger setups

Volume Analysis

Master volume imbalance analysis for better trade entries