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The Fair Value Gap Absorption Indicator is designed based on ICT concepts on the MetaTrader 4 platform. This tool highlights Fair Value Gap (FVG) zones on the chart using colored boxes.
FVGs are gaps formed between candlesticks that represent a temporary imbalance between supply and demand. In addition to displaying these zones, the indicator also shows the degree of price penetration and the percentage of mitigation.
Specification Table of Fair Value Gap Absorption Indicator
The table below presents the specifications of the Fair Value Gap Absorption Indicator.
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Indicator Categories:
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ICT MT4 Indicators
Smart Money MT4 Indicators
Liquidity MT4 Indicators
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Platforms:
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MetaTrader 4 Indicators
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Trading Skills:
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Intermediate
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Indicator Types:
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Reversal MT4 Indicators
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Timeframe:
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Multi-Timeframe MT4 Indicators
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Trading Style:
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Day Trading MT4 Indicators
Scalper MT4 Indicators
Swing Trading MT4 Indicators
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Trading Instruments:
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Stock Market MT4 Indicators
Cryptocurrency MT4 Indicators
Forex MT4 Indicators
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Fair Value Gap Absorption Indicator at a Glance
The zones drawn by the Fair Value Gap Absorption Indicator represent liquidity areas that the price tends to return to. The tool displays bullish FVGs with green boxes and bearish FVGs with red boxes.
When the price returns to these zones, it creates potential entry opportunities in the direction of the main market trend.
Buy Setup
Based on the XAU/USD (Gold vs. US Dollar) chart in the 1-hour timeframe, a bullish FVG is drawn as a green box on the chart.
As shown in the image, the price returns to the FVG zone, absorbs liquidity, and continues its upward movement.
Sell Setup
According to the 1-hour Ethereum (ETH) chart, red boxes are drawn to represent bearish FVG zones. As shown below, when the price revisits the identified zone, it reverses and starts moving downward.
Traders can interpret price retracements to these colored boxes as potential trading setups.
Settings of Fair Value Gap Absorption Indicator
The adjustable parameters in the Fair Value Gap Absorption Indicator are as follows:
- Fair Value Gap Width Filter: Width filter of the fair value gap
- Bearish Fair Value Gap Color: Color of the bearish fair value gap zone
- Bullish Fair Value Gap Color: Color of the bullish fair value gap zone
- Display Percentage of Mitigation: Percentage of mitigation within the FVG zone
- Display Historical Fair Value Gaps: Historical fair value gap zones on chart
Conclusion
The Fair Value Gap Absorption Indicator is designed to display Fair Value Gap zones on the chart. In addition to marking FVGs with colored boxes, it also shows how much of these areas have been filled or absorbed, expressed as a percentage.
Depending on their trading strategy, traders can treat price retracements to these zones as potential trading opportunities.
Fair Value Gap Absorption Indicator MT4 PDF
Fair Value Gap Absorption Indicator MT4 PDF
Click to download Fair Value Gap Absorption Indicator MT4 PDF
Does this indicator generate trading signals?
No, the Fair Value Gap Absorption Indicator does not issue trading signals of any kind.
Can the FVG zone colors be changed?
Yes, users can change the colors of the FVG boxes through the indicator’s settings panel.