A unique indicator that converts Fair Value Gaps into an oscillator, revealing market momentum and potential reversals by tracking price inefficiencies and their dynamic strength.
Explore complementary indicator rolesHow it works
The Fair Value Gap Oscillator scans historical price bars to identify market inefficiencies known as Fair Value Gaps (FVGs), which represent price gaps within bars. It calculates an oscillator by assigning weight to each detected FVG based on its width relative to the Average True Range (ATR).
The oscillator starts at zero and updates when new FVGs appear, with each FVG contributing to the overall momentum signal. As time passes, the oscillator decays older FVGs, ensuring that recent market activity dominates the signal and provides a dynamic representation of current market conditions.
Why it may be useful
The Fair Value Gap Oscillator offers traders a unique perspective on market momentum by transforming traditional static FVG zones into a dynamic, responsive indicator. By converting price inefficiencies into an oscillating signal, traders can gain insights into market sentiment and potential trend reversals more intuitively than with conventional methods.
This approach allows for real-time analysis of market conditions, helping traders identify potential entry and exit points based on the strength and direction of recent Fair Value Gaps. The customizable nature of the indicator, including ATR and volume filters, makes it adaptable to different trading strategies and market types.
When to explore it
The Fair Value Gap Oscillator is most effective in markets with clear price movements and identifiable inefficiencies, such as forex, stocks, and futures markets. It performs best in timeframes that allow sufficient price action for FVG detection, typically ranging from 1-minute to daily charts, making it particularly useful for scalping and day trading.
Traders should use this indicator in conjunction with other technical analysis tools to confirm signals and validate potential trade opportunities. It is especially valuable during trending markets or when looking to identify potential trend reversals based on the oscillation of Fair Value Gaps.
Keep exploring
What we’ve verified
Access, alerts and repainting behaviour have not been independently verified for this indicator. Check the creator’s current publication and settings.
General descriptions and classifications are recovered research. Verified details above identify the specific checks we have completed. Check the creator’s current publication for later changes.
![[blackcat] L2 Trend Guard Oscillator chart preview](https://s3.tradingview.com/v/vp4CfUaG.png?v=1746514602)