Fair Value Gap (FVG) Algorithm: Automated Detection in Pine Script v6

A Fair Value Gap (FVG) occurs during aggressive single-sided price displacement where aggressive market orders consume liquidity without reciprocal two-way auction matching. On a 3-candle sequence, an imbalance forms between Candle 1's wick and Candle 3's wick.

Mathematical 3-Bar Imbalance Formula

Bullish FVG (Demand Imbalance): Occurs when low[0] > high[2]. The unfilled gap zone spans from high[2] (bottom) to low[0] (top).
Bearish FVG (Supply Imbalance): Occurs when high[0] < low[2]. The unfilled gap zone spans from low[2] (top) to high[0] (bottom).

Pine Script v6 Real-Time FVG Tracker with Mitigation

//@version=6
indicator("Dynamic FVG Mitigation Tracker", overlay=true)

bullishFVG = low > high[2]
bearishFVG = high < low[2]

if bullishFVG
    box.new(left=bar_index-2, top=low, right=bar_index+5, bottom=high[2], bgcolor=color.new(color.green, 80), border_color=color.green)

if bearishFVG
    box.new(left=bar_index-2, top=low[2], right=bar_index+5, bottom=high, bgcolor=color.new(color.red, 80), border_color=color.red)
    

SmartCat Algo FVG and Liquidity Mitigation

Figure 1: Institutional FVG retests acting as high-probability entry magnets.

Full Institutional SMC Codebase

SmartCat Algo automates FVGs, Order Blocks, and multi-stage risk management without subscription locks. Download the Pine Script v6 source today.

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