IFVG: Inversion Fair Value Gap
Also known as: IFVG, inverted fair value gap, failed fair value gap, flipped FVG
What is it?
An inversion fair value gap is a fair value gap that failed. Price traded through it and closed on the other side, so the gap stops acting as support and starts acting as resistance - or the reverse for a bearish gap. The array does not disappear when it fails; it changes sides. A bullish fair value gap is expected to hold price up on the retrace. When a candle closes below its lower edge, that expectation is broken and the traders who bought inside it are offside.
The 1.0864-1.0872 gap was support until the 1.0858 close went through it; the same band then capped the rally at 1.0870 and price delivered 48 pips down.
The zone becomes the level they are waiting to exit at, which is why the retest so often caps price. It is the same logic that turns a broken order block into a breaker, applied to a gap. On EUR/USD 15-minute, a bullish gap ran from 1.0864 to 1.0872. Price closed at 1.0858, below the gap, on a displacement candle. Forty minutes later it rallied back to 1.0870, stalled inside the old gap, and fell to 1.0822 - a short with the invalidation only 10 pips away above 1.0880.
The strict part is the close. A wick through a gap has not inverted anything; plenty of gaps are wicked into and still hold. Requiring a candle body to close beyond the far edge is what separates a genuine inversion from a deep fill, and skipping that requirement means fading gaps that are still working. Your capital is at risk on either read. See /risk-warning.
Why it matters: A failed gap does not stop mattering - it flips to the other side of the market, which turns a level you were buying into one you should be selling.
It converts a support array into a resistance array, so trading the old direction after the inversion puts you on the wrong side of a level other traders are exiting into.
Real-world example
On EUR/USD 15m, price closed at 1.0858 below a 1.0864-1.0872 bullish gap; the retest stalled at 1.0870 inside the old gap and price fell to 1.0822.
How SignalBots handles it
SignalBots signals carry a direction and an invalidation level with every alert, so a level that has flipped sides reaches you as a fresh setup rather than a zone you have to re-read yourself. See /risk-warning.
Pro tip
Require a candle body close beyond the far edge before flipping a gap - a wick through it is a deep fill, and deep fills hold often enough to matter.
Common pitfalls
Continuing to buy a bullish fair value gap after price has closed below it, when the zone is now where trapped longs are trying to get out.
Frequently asked questions
What exactly turns a fair value gap into an inversion?
A candle closing beyond the gap's far edge, not a wick through it. Once the body closes outside, the gap has been overrun and traders begin watching it from the opposite side.
How is an IFVG different from a breaker block?
Same idea, different array. A breaker is an order block price closed through; an inversion fair value gap is a gap price closed through. Both flip from one side of the market to the other.
Where do I enter and where does the stop go?
The retest into the old gap is the entry area, with the midpoint often used as the precise level. The stop sits beyond the far edge of the inverted gap, which is what keeps the invalidation tight.
How long does an inversion stay valid?
Until price closes back through it in the original direction, which reclaims the zone. In practice most traders stop using it once structure shifts again, because the context that produced it is gone.
Can the same gap invert more than once?
It can, and that is a warning rather than an opportunity. A level flipping repeatedly means price is ranging across it, and a range makes every retest a coin flip rather than a defended level.
Trading involves substantial risk of loss. Historical and backtested results do not guarantee future performance. Read the full risk warning.
