Trade Comps

Chart-pattern explainer

What is an inverse fair value gap (iFVG)?

An inverse fair value gap is a three-candle gap zone that price has crossed. Traders may then watch the old zone from the other side, but the pattern is a way to organize chart review—not proof of a future move or a trade signal.

See the hypothetical example →Compare community learning with an iFVG tool

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Start with a fair value gap

In the common three-candle description, a bullish gap exists when the first candle’s high sits below the third candle’s low. A bearish gap is the reverse: the first candle’s low sits above the third candle’s high.

Then look for inversion

A bullish gap breached below may be treated as potential resistance on a return. A bearish gap breached above may be treated as potential support. “Potential” matters: neither role is assured.

Fair value gap meaning: first and third candle wicks do not overlap

A fair value gap (FVG) is commonly marked across three consecutive candles. For an upward, or bullish, FVG, compare the outer candles: the first candle’s upper wick ends below the third candle’s lower wick. The space between those two wick levels is the zone. For a downward, or bearish, FVG, the first candle’s lower wick is above the third candle’s upper wick. The middle candle is the displacement candle that sits between them.

This is a chart-labeling convention, not a universal market rule. Platforms and educators can use different minimum sizes, session filters, or wick/body rules. Write down the definition before comparing examples or alerts.

How a bullish FVG becomes an inversion FVG

Suppose a bullish FVG occupies 100–102. The original interpretation is simply that the first and third wicks did not overlap through that two-point area. If a later candle closes at 99, below the zone, many traders call the old bullish gap an inverted FVG. If price later revisits 101, inside the former zone, they may watch it as potential resistance rather than as the original bullish reference.

Hypothetical price path after a bullish fair value gap becomes inverseA simple price-path schematic shows an already established zone from 100 to 102. A later close at 99 passes below it, followed by a retest at 101. The original three-candle formation is not shown, and the schematic is not evidence or entry advice.10210110099Already established hypothetical zone: 100–102close 99: breach belowretest 101Illustrative only — not evidence that a reaction will occur or entry advice.
The original three-candle formation is not shown. This numerical sketch is not a historical chart or a recommendation; a close at 99 and retest at 101 do not establish a setup, direction, or outcome.

Close versus wick: decide your rule before the chart moves

Some people require a candle close through the far edge before calling it inverted. Others flag a wick through the boundary. Neither convention settles whether price will retest or react; use one stated rule consistently and record the timeframe.

A cautious iFVG review checklist

  • Mark the first and third wick levels and the timeframe used.
  • State whether an inversion needs a close or merely a wick breach.
  • Note whether the zone was partly or fully revisited before the breach.
  • Separate an alert or annotation from a reason to take any position.

Learning the pattern versus buying a tool or room

An indicator can draw zones quickly, while a community may focus on interpretation. Before joining a room or subscribing to a chart tool, ask for a sample lesson, its breach definition, replay access, and whether feedback is group-based or individual. Our trading Discord buying guide has a practical framework for those questions.

For one concrete comparison of an iFVG-focused community and a separate tool, see our Dodgy’s Dungeon guide. It is not a performance review, and a chart pattern alone does not make any membership appropriate.

Terminology references: TrendSpider’s fair value gap overview and its inversion fair value gap indicator page. These references inform the terms used here; the hypothetical example and checklist are original educational material.