Fair Value Gap Calculator
Quickly compute fair value gap with accurate formulas. See amortization schedules, growth projections, and side-by-side comparisons.
Reviewed for accuracy by Daniel Agrici, Founder & Lead Developer
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.
References
Reviewed for accuracy by Daniel Agrici, Founder & Lead Developer · Editorial policy
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