Chapter 8 · Part Two
The IFVG Model
When a fair value gap flips its role, it becomes confirmation.
About 6 minutes
The IFVG, or inverse fair value gap, identifies and trades imbalances where price has moved too quickly. When a previous FVG gets traded through by a displacement move, it flips its role.
A bearish FVG that gets displaced through bullishly becomes support. A bullish FVG that gets displaced through bearishly becomes resistance.
- 1Price drives straight through the gap. Its role inverts.
- 2Comes back to the same zone and fails from below.
IFVGs provide extra confirmation on AW Reversal entries. They are not always needed, but when present they significantly increase the probability of the setup holding. Combine IFVG zones with the AW Reversal entry for maximum confluence.
What it looks like on a real chart
NQ1! · 3 minute
- 1The shaded zone started life as an ordinary fair value gap, left behind by the move down.
- 2Price then displaced back up through it. That is what inverts it. A gap that has been traded through no longer acts as the imbalance it was.
- 3Price returns to the zone from the other side and is rejected. What would have been support is now resistance, which is the whole idea behind the name.
- 4This is confluence, not a trigger. The sweep and the neckline break still have to have happened first.
Check yourself
Price rejects cleanly off an inverted FVG, but there has been no sweep and no neckline break. Is there a trade?
Before you move on
- You can spot a gap that has been displaced through
- You know which way the role flips, and why
- You would not take an IFVG on its own as a trade
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