Fair Value Gap Detector | AlphaScript

Fair Value Gap Detector | AlphaScript

Fair Value Gap Detector is a systematic Smart Money Concepts (SMC) tool designed to identify and track Fair Value Gaps (FVGs) directly on your chart, helping traders visualize inefficiencies in price delivery.

Built with a structured and quantitative approach, this tool highlights high-quality imbalances while filtering out low-probability noise using volatility-based conditions.

📊 What it does

This indicator helps you:

-Detect bullish and bearish Fair Value Gaps
-Identify areas of market inefficiency
-Track when gaps are mitigated (filled by price)
-Filter out low-quality setups using ATR-based conditions
-Visualize key levels with optional midpoint (50%) lines

⚙️ How it works

The logic is based on a 3-candle imbalance model, where gaps are identified between price ranges that did not trade efficiently.

To improve signal quality, the tool includes:

-ATR-based filtering to remove insignificant gaps
-Two mitigation modes:
Touch: gap considered filled at the midpoint
Close: gap filled only after full price closure through the zone
-Dynamic tracking of active FVGs with automatic removal once mitigated
-Configurable limit on displayed gaps to keep charts clean and readable

🎯 How to use it

This tool can be used to:

-Identify reaction zones where price may return
-Anticipate retracements or continuation areas
-Add confluence around liquidity and imbalance zones
-Structure entries using inefficiency fills

Typical approach:

-Look for bullish FVGs in uptrends
-Look for bearish FVGs in downtrends
-Use the midpoint (50%) as a refined entry level
-Combine with higher timeframe bias and market structure

🔔 Alerts

Built-in alerts allow you to track:

-New bullish or bearish FVGs
-Mitigation events when price interacts with a gap
-Any new imbalance detected on your chart

🧠 Ideal for

-Traders using Smart Money Concepts (SMC)
-Price action and structure-based traders
-Swing traders and intraday traders
-Anyone looking to add objective imbalance tracking to their system

📝 Notes

This indicator is a decision-support tool, not a standalone strategy.
Best results come from combining it with proper risk management, market context, and a structured trading approach.

To explore our AI-powered trading system and indicator development platform, visit:
alphascript.co