[T] FVG Size Marker

How it works

The Fair Value Gap (FVG) script identifies and highlights price gaps on trading charts by marking specific areas where price has created an imbalance. It automatically detects and visualizes these gaps, which represent zones where price moved quickly without significant trading activity or consolidation.

By sizing and annotating these gaps, traders can quickly recognize potential areas of market inefficiency and imbalance. The script enables custom text overlay, allowing traders to add context about contract size risk directly on the chart, providing immediate visual insights into potential trading opportunities or risk levels.

Why it may be useful

Fair Value Gaps are crucial for traders because they reveal moments of market inefficiency where price moved rapidly without substantial trading activity. These gaps can indicate potential reversal zones, areas of institutional interest, or significant market sentiment shifts that might not be immediately apparent on standard price charts.

By marking and analyzing these gaps, traders gain a deeper understanding of market microstructure, helping them identify potential entry and exit points with enhanced precision. The ability to overlay custom text about contract size risk further empowers traders to make more informed decisions by providing immediate contextual information.

When to explore it

Fair Value Gap analysis works best in markets with high liquidity and frequent price movements, such as forex, futures, and major stock indices. Traders should focus on using this technique during active trading hours when market participation is strongest and price dynamics are most volatile.

The script is particularly effective for short-term trading strategies like scalping and day trading, where quick identification of market imbalances can provide a competitive edge. Traders should combine FVG analysis with other technical indicators and risk management strategies to maximize its effectiveness and validate potential trading signals.

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