Inversion Fair Value Gap Signals [AlgoAlpha]

16 hours ago

🟠OVERVIEW
This script is a custom signal tool called Inversion Fair Value Gap Signals (IFVG), designed to detect, track, and visualize fair value gaps (FVGs) and their inversions directly on price charts. It identifies bullish and bearish imbalances, monitors when these zones are mitigated or rejected, and extends them until resolution or expiration. What makes this script original is the inclusion of inversion logic—when a gap is filled, the area flips into an opposite "inversion fair value gap," creating potential reversal or continuation zones that give traders additional context beyond classic FVG analysis.

🟠CONCEPTS
The script builds on the Smart Money Concepts (SMC) principle of fair value gaps, where inefficiencies form when price moves too quickly in one direction. Detection requires a three-bar sequence: a strong up or down move that leaves untraded price between bar highs and lows. To refine reliability, the script adds an ATR-based size filter and prevents overlap between zones. Once created, gaps are tracked in arrays until mitigation (price closing back into the gap), expiration, or transformation into an inversion zone. Inversions act as polarity flips, where bullish gaps become bearish resistance and bearish gaps become bullish support. Lower-timeframe volume data is also displayed inside zones to highlight whether buying or selling pressure dominated during gap creation.

🟠FEATURES

1. Automatic detection of bullish and bearish FVGs with ATR-based thresholding.
   
2. Inversion logic: mitigated gaps flip into opposite-colored IFVG zones.
   
3. Volume text overlay inside each zone showing up vs down volume.
   
4. Visual markers (△/▽ for FVG, ▲/▼ for IFVG) when price exits a zone without mitigation.
   

🟠USAGE
Apply the indicator to any chart and enable/disable bullish or bearish FVG detection depending on your focus. Use the colored gap zones as areas of interest: bullish gaps suggest possible continuation to the upside until mitigated, while bearish gaps suggest continuation down. When a gap flips into an inversion zone, treat it as potential support/resistance—bullish IFVGs below price may act as demand, while bearish IFVGs above price may act as supply. Watch the embedded up/down volume data to gauge the strength of participants during gap formation. Use the △/▽ and ▲/▼ markers to spot when price rejects gaps or inversions without filling them, which can indicate strong trending momentum. For practical use, combine alerts with your trade plan to track when new gaps form, when old ones are resolved, or when key zones flip into inversions, helping you align entries, targets, or reversals with institutional order flow logic.

16 hours ago

Release Notes

- Minor clean up

15 hours ago

Release Notes

- Rearranged inputs
- Extended zones further right