Inverted Fair Value Gap (IFVG): ICT Rules and Retests

Framework note: ICT terms are interpretations of price action, not proof of institutional motives or a market algorithm’s intent. No setup is guaranteed. Test clearly defined rules, account for costs and slippage, and use risk limits before risking capital. Read our editorial policy.

An Inversion Fair Value Gap (IFVG) is commonly described as an FVG that price has traded through and may later treat differently. The label depends on the selected boundary and close rule; it does not by itself predict a reversal or identify who traded there.

How an IFVG Forms

Some traders treat an unviolated bullish FVG as a candidate support area in their plan. A touch or close through the zone does not reveal institutional buying interest; price may hold, pass through or never return.

Under one IFVG rule, a close below the full bullish gap changes how the zone is classified. That price event does not show that institutional buy orders were waiting there or that they have been filled and exhausted; those claims require evidence beyond candles.

Identifying the IFVG on Your Chart

• •Mark all active bullish FVGs on your chart.
• •Monitor each FVG as price approaches from above. If price enters the FVG but does NOT close below the bottom edge, the FVG is still active — it has not been violated.
• •If price closes a candle below the bottom edge of the bullish FVG (fully through the gap), the FVG has been violated and becomes an IFVG — now acting as bearish resistance.
• •For bearish FVGs: if price closes above the top edge of a bearish FVG, it flips to a bullish IFVG — acting as support on the next approach from below.
• •Mark the IFVG clearly on your chart with a different color than your standard FVGs to avoid confusing active FVGs with inverted ones.

Trading the IFVG

Once an IFVG is established, it becomes a PD Array element in the new direction. For a bearish IFVG (former bullish FVG that was violated), wait for price to retrace back up into the IFVG zone. Enter short at the CE of the IFVG zone (the 50% midpoint of the original FVG). Stop: above the top edge of the original FVG. Target: the next sell-side liquidity pool below.

For a bullish IFVG (former bearish FVG that was violated), wait for price to return down into the IFVG zone. Enter long at the CE. Stop: below the bottom of the original FVG. Target: the next buy-side liquidity pool above.

IFVG vs Standard FVG — Probability Comparison

A violated FVG can be studied as a separate setup type, but it should not be presumed to produce sharper reactions or contain two layers of institutional significance. Compare both types using a prewritten sample and the same execution assumptions.

Worked hypothetical example

A trader marks a bullish FVG from 100 to 102 using a fixed three-candle rule. A later candle closes below the lower boundary, so the trader marks a candidate inversion for review. When price revisits 101, it continues upward through the zone rather than rejecting it; this outcome is kept in the sample.

Failure case and what to test

A wick through the gap and a closing break may be treated differently by different definitions. Chosen timeframe, candle construction and the required confirmation can change the number of candidates and results.

Test checklist

• •Write the violation rule: wick, close or another preselected condition.
• •Record which boundary is required for confirmation and invalidation.
• •Compare IFVG candidates with ordinary FVG revisits and no-trade baselines.

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