Inversion Fair Value Gap (IFVG)

Identification Rules

  • Must start with a valid Fair Value Gap (three-candle imbalance pattern)
  • Original FVG must be invalidated by price wick or candle close penetrating the gap
  • Zone boundaries are defined by the original FVG high and low levels

Entry Rules

  • Enter when price returns to test the IFVG zone after invalidation
  • For bullish IFVG: enter long when price reacts from the zone
  • For bearish IFVG: enter short when price reacts from the zone

Stop Rules

  • Place stop loss below bullish IFVG zone
  • Place stop loss above bearish IFVG zone
  • Use tight stops just outside the IFVG boundaries

Target Rules

  • Target 1:2 risk-to-reward ratio as standard approach
  • Target previous swing highs/lows for longer-term trades
  • Scale out at multiple levels if strong momentum develops

Confluence Factors

  • Liquidity grab preceding IFVG formation
  • Multiple timeframe alignment
  • Breaker blocks or order blocks nearby
  • Market structure support (BOS/ChoCh)
  • Volume confirmation at zone test

Failure Modes

  • False invalidation
  • No reaction at IFVG
  • Immediate invalidation

Common Mistakes

  • Trading IFVGs without confluence factors
  • Using IFVGs on lower timeframes without higher TF context
  • Not waiting for proper FVG invalidation