Fair Value Gap Calculator
Quickly compute fair value gap with accurate formulas. See amortization schedules, growth projections, and side-by-side comparisons.
Fair Value Gap Calculator
Calculator
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Formula: Bullish FVG: Gap = Candle 3 Low − Candle 1 High | Bearish FVG: Gap = Candle 1 Low − Candle 3 High | CE = (Top + Bottom) / 2
Worked example — Bullish FVG: 1.0920–1.0935 | CE: 1.09275 | 15 pips
Formula
Bullish FVG: Gap = Candle 3 Low − Candle 1 High | Bearish FVG: Gap = Candle 1 Low − Candle 3 High | CE = (Top + Bottom) / 2
A Fair Value Gap forms when candle 2 creates an impulse move that leaves a gap between candle 1 and candle 3 wicks. For a bullish FVG, the gap exists between candle 1's high and candle 3's low. For a bearish FVG, between candle 1's low and candle 3's high. The Consequent Encroachment (CE) is the exact midpoint of this gap.
Worked Examples
Example 1: Bullish FVG on EUR/USD
Problem:Candle 1 high: 1.0920, Candle 3 low: 1.0935. Identify the FVG range and CE level.
Solution:FVG Top = Candle 3 Low = 1.0935 FVG Bottom = Candle 1 High = 1.0920 FVG Size = 1.0935 - 1.0920 = 0.0015 = 15 pips CE (Midpoint) = (1.0935 + 1.0920) / 2 = 1.09275
Result:Bullish FVG: 1.0920–1.0935 | CE: 1.09275 | 15 pips
Example 2: Bearish FVG on GBP/USD
Problem:Candle 1 low: 1.2650, Candle 3 high: 1.2630. Identify the FVG and entry level.
Solution:FVG Top = Candle 1 Low = 1.2650 FVG Bottom = Candle 3 High = 1.2630 FVG Size = 1.2650 - 1.2630 = 0.0020 = 20 pips CE (Midpoint) = (1.2650 + 1.2630) / 2 = 1.2640
Result:Bearish FVG: 1.2630–1.2650 | CE: 1.2640 | 20 pips
Frequently Asked Questions
What is a Fair Value Gap (FVG) in ICT trading?
A Fair Value Gap (FVG) is a three-candle price pattern identified in the Inner Circle Trader (ICT) methodology. It represents an imbalance in price where a strong impulse candle creates a gap between the wicks of the candles on either side of it. Specifically, a bullish FVG forms when candle 3's low is higher than candle 1's high, leaving an unfilled space. Price tends to return to these gaps to rebalance, making them key areas for trade entries. FVGs are visible on all timeframes and are used by smart money concept traders to identify institutional order flow and potential reversal zones.
What is Consequent Encroachment (CE) in ICT?
Consequent Encroachment (CE) is the exact midpoint or 50% level of a Fair Value Gap. In ICT methodology, CE is considered a precision entry point because institutional algorithms often target this level when price returns to fill an FVG. Instead of placing orders at the top or bottom of the gap, advanced traders use the CE level for tighter entries with better risk-to-reward ratios. When price reaches the CE level, it is said to have 'consequentially encroached' upon the fair value gap, indicating that the imbalance has been partially addressed by the market.
How do you trade a bullish Fair Value Gap?
To trade a bullish FVG, first identify a three-candle pattern where a strong up candle (candle 2) creates a gap between candle 1's high and candle 3's low. Wait for price to retrace back down into the FVG zone. Place a buy limit order at the FVG bottom or at the CE (midpoint) for a more precise entry. Your stop loss should go below the FVG low or below candle 2's low for added protection. Target previous highs, opposing FVGs, or liquidity pools above the market. Always confirm with higher timeframe bias and look for FVGs that align with the overall market structure and order flow direction.
What is the difference between a Fair Value Gap and a regular gap?
A traditional gap occurs when the market opens at a different price than the previous close, typically over weekends or after major news events. A Fair Value Gap, however, occurs intraday within continuous price action and is defined by the relationship between three consecutive candles. Regular gaps are visible as empty spaces on the chart, while FVGs may not be immediately obvious because candle 2's body and wicks fill the visual space. FVGs represent institutional imbalance and inefficiency in price delivery, whereas regular gaps can be caused by various factors including low liquidity periods. Both tend to get filled, but FVGs are specifically tied to smart money concepts and algorithmic trading behavior.
Do Fair Value Gaps always get filled?
Not all Fair Value Gaps get filled, but the majority do eventually see price return to them. In ICT methodology, FVGs on higher timeframes (4-hour, daily, weekly) are more significant and more likely to act as magnets for price. FVGs that form during high-impact news events or during killzone times tend to be more reliable. Some FVGs get partially filled (to the CE level) while others get completely filled and even exceeded. The key is to use FVGs in confluence with other ICT concepts like order blocks, liquidity levels, and market structure. A strong trend may leave several unfilled FVGs as price continues in one direction before eventually retracing.
What is an Inversion Fair Value Gap and how does it differ from a normal FVG?
An Inversion Fair Value Gap, or IFVG, is a gap that has been traded fully through rather than merely respected. When price closes decisively beyond a bullish FVG instead of bouncing from it, that failed demand zone flips role and is expected to act as resistance on any return, and the mirror applies to a bearish gap. The distinction matters for order placement: a normal FVG is traded in the direction of the impulse that created it, while an IFVG is traded against it, in the same way a broken support level becomes resistance.
Why does the calculator report no valid FVG when the middle candle is clearly large?
The definition depends on wick overlap, not body size. A bullish gap requires candle 3's low to sit strictly above candle 1's high, and a bearish gap requires candle 3's high to sit strictly below candle 1's low. If the outer candles overlap by even a fraction, the range has already been traded at both prices and no imbalance exists, however dramatic the impulse candle looks. Long wicks on candle 1 or candle 3 are the usual cause. Overlapping structures of this kind are better classified as volume imbalances or simple wide-range bars.
How should the size of a Fair Value Gap influence how you trade it?
Gap width sets the distance between your entry and the level that invalidates it, so it drives both risk and fill probability. A very narrow gap of a few pips will often be swept in a single tick and offers no room to place a stop outside the structure. A very wide gap covering a large part of the prior range may take a long retracement to reach and is frequently only partially filled, which is why the Consequent Encroachment midpoint is used as the working entry. Compare the pip figure here against the instrument's average candle range on the same timeframe before deciding.
When should you set the pip size to 0.01 instead of 0.0001?
The pip size field only converts the raw gap into pip units, so it must match the quoting convention of the instrument. Pairs quoted to five decimal places, such as EUR/USD or GBP/USD, use 0.0001 as one pip. Yen-quoted pairs such as USD/JPY are priced to three decimals and use 0.01. Metals and indices vary by broker, so check how your platform defines a pip before relying on the converted figure. The gap boundaries and the CE level are unaffected by this setting because they are expressed in raw price.
What is the difference between a Fair Value Gap and an order block?
They describe different things at the same location. An order block is a candle, typically the last opposing candle before an impulsive move, treated as the origin of institutional positioning. A Fair Value Gap is the empty price range left behind by that impulse, an inefficiency in delivery rather than a source of orders. Order blocks are drawn from the open and low, or open and high, of a single candle; FVGs are measured across three. The highest-conviction zones occur where an order block and a fair value gap overlap, since entry, invalidation, and imbalance all point to the same range.
References
Reviewed for accuracy by Daniel Agrici, Founder & Lead Developer · Editorial policy
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