Inversion Fair Value Gap

Also: IFVG · Inverted FVG

Definition

An Inversion Fair Value Gap (IFVG) is a [[Fair Value Gap (FVG)]] that has been violated — closed through with [[Displacement]] — causing it to flip polarity. A violated bearish FVG now behaves as support (bullish IFVG); a violated bullish FVG now behaves as resistance (bearish IFVG). It is the FVG equivalent of a [[Breaker Block]].

Key characteristics

• Requires a prior FVG that gets closed through, not merely tagged
• Polarity inversion on retest — old resistance becomes support and vice versa
• [[Consequent Encroachment]] still serves as the primary midpoint reference
• Often confirms a [[Market Structure Shift]]
• Works powerfully on opening gaps (NWOG/NDOG) when they invert
• Must be accompanied by displacement through the gap for validity
• POST-INVERSION RULES — once an FVG inverts (price closes through it and the level now serves the opposite role), the same FVG discipline applies in the new direction. The hard invalidation is bodies closing back through the gap entirely. CE-respect is preferable, not required.
• WICKS VS BODIES applies inverted — wicks back into the inverted FVG can damage; bodies closing back across the gap fully invalidates the inversion.
• BODY-PLACEMENT GRADIENT inverts cleanly — for an inverted bearish FVG (now bullish): BEST = bodies at the high of the gap and react away. GREAT = bodies at CE. ACCEPTABLE = bodies past CE but still inside.
• FULL-CLOSURE RULE applies — if price returns to the far edge of the inverted FVG, demand immediate rejection or treat the inversion as failed.
• TIME-IN-GAP and overlap diagnostics apply unchanged — extended time inside the inverted FVG signals weak commitment.

How it forms

Price creates a bearish FVG on the way down. Later, the algorithm displaces through that FVG to the upside with a strong close-through — not just a wick. Now the FVG has been "flipped." When price retraces back to that gap zone, it acts as support rather than resistance, marking a high-probability long entry.

How to use

Wait for displacement through an existing FVG. Mark the flipped gap. Enter on retest at the near edge or CE. Stop beyond the far edge. Target the next opposing PD array. IFVGs are particularly clean on NY session reversals where a morning FVG gets inverted during the PM session.

POST-INVERSION DISCIPLINE — once the FVG inverts, the level serves the opposite role and the same FVG body-placement gradient applies in the new direction. The hard boundary is bodies closing back through the gap entirely. CE is preferable, not required. Wicks can violate freely; only bodies are diagnostic.

FULL-CLOSURE RULE — if price trades to full FVG closure (bodies reach the far edge: the high of a Premium/SIBI gap or the low of a Discount/BISI gap), the level is on its last chance. Demand immediate rejection. Quick price action away. An immediate rebalance. If movement away is not immediate, the level is dead even though it has not technically closed outside. This is the tell that the algorithm is no longer respecting the inefficiency.

TIME-IN-GAP is the quality tell. If price spends extended candles parked inside the FVG, the level is high-resistance and low-probability — institutional respect is absent. Heavy overlap between consecutive candles inside the gap (each new candle sitting deep inside the previous one's range) is the same signal: the algorithm is not honoring the level cleanly. The cleanest FVG fills are decisive — wick in, body close on the correct side, displacement away.

Common mistakes

• Calling an FVG "inverted" when price only wicked through — requires closure through the gap
• Ignoring the fact that the IFVG must still align with HTF bias and premium/discount
• Treating the IFVG as identical to a fresh FVG — its reaction profile is different

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