Fair Value Gap (FVG) Confluence: Imbalance Fill Probability & Sizing
A Fair Value Gap (FVG) is a 3-candle pattern where candle 1 wick and candle 3 wick do not overlap, leaving an inefficiency. Entering at Consequent Encroachment (CE - the exact 50% midpoint of the gap) provides optimal institutional entry pricing with stops placed just beyond candle 1 wick.
Price moves to rebalance inefficiencies left during rapid algorithmic expansion. By aligning FVG fills with higher timeframe market structure, traders execute precision entries with minimal drawdown excursion.
INTERACTIVE POSITION SIZING & RISK SIMULATOR
2026 BENCHMARK & COMPARISON DATA MATRIX
| Imbalance Type | Pattern Anatomy | Institutional Rebalance Goal | Optimal Entry Level | Invalidation Point |
|---|---|---|---|---|
| BISI (Bullish Imbalance) | Candle 2 rallies aggressively | Price dips to fill buy orders | 50% Consequent Encroachment (CE) | Low of Candle 1 |
| SIBI (Bearish Imbalance) | Candle 2 plunges aggressively | Price rallies to fill sell orders | 50% Consequent Encroachment (CE) | High of Candle 1 |
| Inversion FVG | Price blows through FVG | Imbalance flips to opposite role | Retest of former gap level | Opposite boundary of FVG |
| Volume Imbalance | Bodies do not overlap, wicks do | Quick tick rebalance | Immediate wick retest | Opposite body close |
Consequent Encroachment (CE) Precision Math
Calculating the exact 50% level: CE = Low of High Candle + ((High of Low Candle - Low of High Candle) / 2). Institutional algorithms frequently touch this exact mathematical cent before reversing violently.
Size FVG Consequent Encroachment Orders
Engineered for zero-math error execution. Tested across MT4/MT5 and Binance futures.
FREQUENTLY ASKED QUESTIONS & EXPERT CLARIFICATIONS
Do all Fair Value Gaps get filled immediately?
No! In strong runaway trending markets, breakaway FVGs remain open for weeks. Only trade FVGs that occur in the direction of the dominant higher-timeframe order flow.
Author: TradeCoreHub Quantitative Risk & Algorithmic Desk. Peer-reviewed against CME tick specifications, FTMO/FundedNext drawdown contracts, and Binance USD-M liquidation mechanics.
Audit Standard: Zero-Math-Error validation. Formulas are calibrated to ensure absolute capital survivability across statistical losing streaks.
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