Fair Value Gaps
Last updated
Last updated
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The Fair Value Gaps feature is a dynamic tool designed to automatically identify and plot Fair Value Gaps on your chart. This feature is enhanced by a built-in quality filter, which enables users to focus on significant Fair Value Gaps rather than every gap that appears. By highlighting the more impactful gaps, this tool offers users a potential edge in market analysis, allowing for more targeted and effective trading strategies.
You can enable the Fair Value Gaps feature in your indicator settings:
Fair Value Gaps 1
Choose the timeframe for viewing Fair Value Gaps.
Fair Value Gaps 2
Choose the timeframe for viewing Fair Value Gaps.
Mitigation Mode
Selects the method to address Fair Value Gaps. - Close: Removes gaps when the price breaks and closes through. - Reduce: Reduces gaps when the price touches them.
Extend Box
Expands the Fair Value Gap display.
Quality Filter
Filters out insignificant Fair Value Gaps.
Key Levels
Shows key levels within Fair Value Gaps. - Disabled: No key level display. - Half: Key levels at the gap's middle.
Show Text
Displays text for Fair Value Gaps.
Prioritize Significant Gaps: Utilize the quality filter to concentrate on the most significant Fair Value Gaps. These gaps are likely to be more impactful and relevant to market movements.
Incorporate into Market Analysis: Integrate Fair Value Gaps into your broader market analysis. These gaps can provide insights into market sentiment and potential areas of price movement.
Use as Potential Entry or Exit Points: Consider using significant Fair Value Gaps as potential entry or exit points. Prices often return to these gaps, making them strategic locations for trading decisions.
Risk Management: Apply Fair Value Gaps in your risk management plan. Be aware of the potential for rapid price movements in and around these gaps and set stop-loss orders accordingly.
Combine with Other Indicators: For a more comprehensive analysis, use Fair Value Gaps in conjunction with our other technical indicators. This can help in validating the strength and potential impact of these gaps.
Historical Gap Analysis: Review how the market has previously reacted to Fair Value Gaps. This historical perspective can offer valuable insights for future trading strategies.
The example below shows how a bullish Fair Value Gap is detected which led to a consistent bullish market trend.
