Detecting Inverted Fair Value Gaps and Bounce Signals

Summary

This indicator identifies fair value gap zones, marks a zone as inverted when a candle body closes through it, and can signal a later bounce from the flipped zone. The design tracks gaps and their lifecycle, including creation, inversion, active status, and filling. Users can choose whether bounce detection uses closes or wicks, filter gaps by an ATR-based size threshold, limit displayed zones and history, and configure bullish or bearish colors, midlines, alerts, and event logging. The code describes bar-close processing and claims signals do not repaint.

The document is implementation-focused: it includes indicator state, event handling, chart display, alert options, and optional parity-file output. It provides no trading results, validation study, or evidence that gap inversions predict profitable moves. Signals depend on the chosen bounce definition, ATR settings, history, and platform data. The no-repaint behavior is a stated design property, not independently demonstrated in the supplied text. Traders would need to evaluate the indicator with explicit execution assumptions and risk controls before treating its signals as a strategy.

Key ideas

• A fair value gap becomes an inverted zone when a candle body closes across it.
• The indicator signals potential bounces from inverted zones using either close- or wick-based detection.
• An ATR threshold filters zones, while display, history, and alert behavior are configurable.
• The document explains implementation behavior but supplies no evidence of trading performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.