Consequent Encroachment

Also: CE · Consequent Encroachment · Midpoint of Gap

Definition

Consequent encroachment is the 50% midpoint of a [[Fair Value Gap (FVG)]] or any gap structure. It is the primary entry and target reference inside an imbalance. When the algorithm rebalances an FVG, price very often trades specifically to CE and reverses, rather than fully filling the gap.

Key characteristics

• 50% of the gap — measured from one candle's extreme to the next's opposing extreme
• The algorithm "aims for" CE, not the full gap fill
• Primary limit-order placement inside FVGs
• Applies to [[Fair Value Gap (FVG)]], opening gaps, [[Balanced Price Range]], and NWOG/NDOG
• Surgical entry zone on short timeframes (1m, 3m, 5m)
• Acts as both entry and partial-target depending on setup direction

How it forms

The algorithm's rebalancing logic targets the midpoint of inefficiencies, not full closure. Once CE is tagged, the imbalance is considered "addressed" and price can resume the prevailing delivery direction. This is why gaps often appear unfilled to retail eyes — they were filled at CE.

How to use

Place limit entries at CE inside a qualified FVG. Stop beyond the far edge of the gap. For targets, CE of an opposing FVG is often the first partial. On opening gaps (NWOG/NDOG), CE is a frequent turn-point. This is the finest-grain precision level ICT teaches.

Common mistakes

• Waiting for full gap fill and missing the move that turns at CE
• Using CE on low-quality gaps not produced by displacement
• Confusing CE (FVG midpoint) with MT (OB midpoint)

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