Best Trade Entry Setup - Inversion Fair Value Gap (IFVG) | ICT Series EP 04

Fair Value Gaps and Inversion Fair Value Gaps

The video explains ICT’s Fair Value Gap (FVG) and Inversion Fair Value Gap (IFVG) as price-action trading concepts. It presents an FVG as an area where a fast price move left limited two-sided trading, and describes a failed gap as potentially changing roles: former support can become resistance, or former resistance can become support. These are claims within the video’s trading framework, not demonstrated performance results.

FVG Selection and Trade Framework

The video recommends filtering gaps using three criteria:

• Origin: Prefer a gap created by displacement immediately after a liquidity sweep. Gaps forming mid-range are described as less reliable.
• Direction: Favor gaps aligned with the market’s draw on liquidity—bullish gaps when the draw is upward and bearish gaps when it is downward.
• Freshness: Favor unmitigated gaps, especially on the first return. The video says a gap’s usefulness is reduced after it has been filled.

A gap’s midpoint is called Consequent Encroachment (CE), or the 50% level. The video’s candle-based interpretation is:

• A bounce from the near edge suggests a strong gap.
• A wick through CE, followed by a candle body closing back on the favorable side, is treated as a valid gap.
• A candle body closing beyond CE is an early warning that the gap is weakening.
• A candle body crossing and closing beyond the entire gap means the original setup has failed.

For a conventional FVG trade, the suggested plan is to enter within the gap, often near CE; place the stop beyond the liquidity-sweep extreme; and target the next untapped liquidity pool.

IFVG Setup

The video says a failed gap may invert rather than simply be discarded. A failed bullish FVG may act as bearish resistance, while a failed bearish FVG may act as bullish support.

It offers two possible explanations: traders who were positioned in the original direction may exit when price returns to the gap, and the gap’s failure may indicate that control has shifted to the opposite side.

The IFVG rules presented are:

• The gap must be broken by a candle body, not merely pierced by a wick.
• Prefer a break made with strong displacement; a break by a small candle is described as less reliable. A stronger signal is said to occur when the break also creates a new FVG in the opposite direction.
• Do not enter immediately on the break. Wait for price to return to the inverted gap and reject it.
• Place the stop just beyond the IFVG or beyond the swing high or low where the break began. Target the next untapped liquidity pool.

A highlighted reversal example combines a sweep below the previous day’s low with bullish displacement that breaks a bearish FVG. The video interprets the inversion as evidence that the preceding decline was manipulation and the reversal move has begun.

Risks and Cautions

• Not every FVG or IFVG is reliable; context—where and when it formed, and its direction—matters.
• Some trend days do not retrace to the gap. The video cautions against chasing price outside the planned entry zone.
• No tickers, specific securities, market prices, yields, return figures, or backtested performance metrics are provided.
• No explicit “not financial advice” disclaimer appears. The channel warns about fraud impersonating it and says it does not operate premium Telegram groups or sell trading tips.

Assets and Instruments Mentioned

No specific stocks, ETFs, cryptocurrencies, bonds, commodities, or other named instruments are mentioned. The discussion concerns price charts and liquidity levels.

Presenters and Sources

No individual presenter is identified in the subtitles. The video is from The Brain Titans and explains concepts attributed to ICT, referring to earlier videos in the channel’s Smart Money Concepts series.