Implied Fair Value Gap
Also known as: implied FVG, IFVG (implied), wick-based fair value gap, hidden imbalance
What is it?
An implied fair value gap is an imbalance that hides inside a three-candle sequence whose wicks overlap, so no visible gap appears - the inefficiency is in how little of the middle candle actually traded, not in a space between highs and lows. A standard fair value gap needs the first candle's high to sit below the third candle's low, leaving a visible band. In an implied gap that condition fails by a few pips, yet the middle candle is a long body with two very short wicks - it ran through the area so quickly that the market spent almost no time there.
The zone is measured from the midpoint of the first candle's upper wick to the midpoint of the third candle's lower wick. On EUR/USD, wicks spanning 1.0862 to 1.0871 and 1.0884 to 1.0893 give an implied gap of roughly 1.08665 to 1.08885, about 22 pips of thinly traded price. Note the name collision: ICT material also abbreviates the inversion fair value gap as IFVG, and that is a different thing - a gap that failed and flipped polarity.
The implied gap has not failed at all; it simply never looked like a gap in the first place. Traders use it exactly as they use a standard gap, with the caveat that it is a judgement call rather than a measurable condition.
Why it matters: An implied fair value gap marks thinly traded price that no visible gap reveals, so a level that looks like ordinary candles can still behave like an imbalance.
Implied gap = midpoint of candle 1's upper wick to midpoint of candle 3's lower wick
It surfaces zones a standard gap scan misses, which changes where a retracement is expected to react rather than how large the trade is.
Real-world example
On EUR/USD the wicks at 1.0862-1.0871 and 1.0884-1.0893 left no visible gap, but price retraced precisely to 1.08665 - the implied zone's base - before continuing to 1.0952.
How SignalBots handles it
SignalBots states the level a setup reacts from in the signal itself, so you can check the zone against your own chart instead of reverse-engineering it after the move. See /risk-warning.
Pro tip
Only mark an implied gap when the middle candle's body dwarfs both its wicks - without that, you are drawing a zone on ordinary two-way trading.
Common pitfalls
Confusing it with the inversion fair value gap, which shares the IFVG shorthand but describes a failed gap that now works in the opposite direction.
Frequently asked questions
Why does the implied gap use wick midpoints?
Because the wick shows where price visited without settling. Taking the midpoint keeps the zone to the half of each wick nearest the imbalance, which is the part the fast candle actually skipped through.
Is an implied gap weaker than a standard one?
It is less objective. A standard gap is a measurable condition anyone can verify; an implied gap depends on your reading of the candle's shape, so two traders can mark different zones on the same chart.
How is this different from an inversion fair value gap?
Different concept, same abbreviation. An inversion gap is a normal gap that price closed through, flipping it from support to resistance. An implied gap has never failed - it just never showed a visible space.
Can I automate detection of implied gaps?
Partly. You can screen for a middle candle whose body is a large multiple of its wicks with near-touching outer wicks, but the final call still rests on context, so treat the output as candidates rather than signals.
Which timeframe suits it best?
The same one you already trade structure on. On very low timeframes almost every fast candle looks like an implied gap, which produces far more zones than are useful and puts capital at risk on noise.
Trading involves substantial risk of loss. Historical and backtested results do not guarantee future performance. Read the full risk warning.
