OPEN-SOURCE SCRIPT
FVG Touch Extension [TAG]
FVG Touch Extension [TAG] highlights Fair Value Gaps using a simple three-candle imbalance model and extends each zone to the right until price revisits it.
This indicator is designed to help traders identify price areas where the market moved with enough speed and aggression to leave an imbalance behind. In practical terms, these are zones where one side of the market was clearly stronger than the other, causing price to move through levels quickly instead of trading efficiently through them.
How the script defines an FVG
This script uses a three-candle structure:
Bullish FVG
Bearish FVG
To filter out weak or meaningless gaps, the script only plots an FVG when the gap size is at least a user-defined percentage of the size of candle 2. By default, that threshold is 40%.
Why Fair Value Gaps matter
At Alpha Group, we interpret an FVG as a sign of liquidity imbalance.
When a bullish FVG appears, it suggests that buying pressure was aggressive enough to move through available liquidity quickly. In other words, buyers were willing to keep paying higher prices, and the market moved fast because there was not enough sell-side liquidity at those levels to absorb that flow in a balanced way.
When a bearish FVG appears, the logic is the opposite. Selling pressure was aggressive enough to consume the available bids quickly, forcing price lower as sellers hit the market with more urgency than the available buy-side liquidity could absorb.
That is why these zones matter. They often represent areas where the market moved too efficiently in one direction and may later return to reassess that imbalance.
How to read the zones
An FVG is not a stand-alone buy or sell signal. It is a market structure and order-flow clue.
When price revisits an FVG, that zone can become a useful decision area for several reasons:
Our internal Alpha Group reading is straightforward:
If price returns to a bullish imbalance and buyers defend it cleanly, that can support a bullish continuation view.
If price returns to a bearish imbalance and sellers defend it cleanly, that can support a bearish continuation view.
If price trades through the zone easily, the original imbalance may no longer be respected, and the market may be signaling weaker conviction from the side that created it.
Extension logic
Each FVG is drawn as a box and extends to the right until price touches the zone.
This matters because the indicator is trying to preserve the practical usefulness of the imbalance:
This gives traders a cleaner view of which imbalances are still untouched and which ones have already been tested.
Color logic
This script colors FVGs based on their location relative to the current price:
This is a visual context feature. It helps quickly distinguish whether the gap is currently under price or above price without forcing the trader to manually inspect each zone.
Inputs
Best use cases
This tool is best used as a context indicator, not as a complete trading system by itself.
It can be useful for:
Important note
This script identifies a specific technical condition based on price gaps across a three-candle sequence. It does not predict direction by itself and should not be treated as financial advice or as a guaranteed edge. Use it as one part of a broader decision process.
This indicator is designed to help traders identify price areas where the market moved with enough speed and aggression to leave an imbalance behind. In practical terms, these are zones where one side of the market was clearly stronger than the other, causing price to move through levels quickly instead of trading efficiently through them.
How the script defines an FVG
This script uses a three-candle structure:
Bullish FVG
- A bullish gap exists when the low of candle 3 is above the high of candle 1
- The empty space between those two prices is the bullish FVG
Bearish FVG
- A bearish gap exists when the high of candle 3 is below the low of candle 1
- The empty space between those two prices is the bearish FVG
To filter out weak or meaningless gaps, the script only plots an FVG when the gap size is at least a user-defined percentage of the size of candle 2. By default, that threshold is 40%.
Why Fair Value Gaps matter
At Alpha Group, we interpret an FVG as a sign of liquidity imbalance.
When a bullish FVG appears, it suggests that buying pressure was aggressive enough to move through available liquidity quickly. In other words, buyers were willing to keep paying higher prices, and the market moved fast because there was not enough sell-side liquidity at those levels to absorb that flow in a balanced way.
When a bearish FVG appears, the logic is the opposite. Selling pressure was aggressive enough to consume the available bids quickly, forcing price lower as sellers hit the market with more urgency than the available buy-side liquidity could absorb.
That is why these zones matter. They often represent areas where the market moved too efficiently in one direction and may later return to reassess that imbalance.
How to read the zones
An FVG is not a stand-alone buy or sell signal. It is a market structure and order-flow clue.
When price revisits an FVG, that zone can become a useful decision area for several reasons:
- It can act as a pullback zone in a trending market
- It can help frame a continuation trade
- It can help evaluate whether price is likely to reject or trade through the imbalance
- It can provide a cleaner location to judge whether buyers or sellers are still in control
Our internal Alpha Group reading is straightforward:
If price returns to a bullish imbalance and buyers defend it cleanly, that can support a bullish continuation view.
If price returns to a bearish imbalance and sellers defend it cleanly, that can support a bearish continuation view.
If price trades through the zone easily, the original imbalance may no longer be respected, and the market may be signaling weaker conviction from the side that created it.
Extension logic
Each FVG is drawn as a box and extends to the right until price touches the zone.
This matters because the indicator is trying to preserve the practical usefulness of the imbalance:
- If price has not returned to that area yet, the zone remains active and continues extending
- Once price touches the zone, the extension stops, marking the first revisit
This gives traders a cleaner view of which imbalances are still untouched and which ones have already been tested.
Color logic
This script colors FVGs based on their location relative to the current price:
- Green: FVG below the current price
- Red: FVG above the current price
This is a visual context feature. It helps quickly distinguish whether the gap is currently under price or above price without forcing the trader to manually inspect each zone.
Inputs
- Minimum Gap Size as % of Candle 2
Filters out small gaps. Default is 40%. - Use Candle 2 Body Instead of Full Range
Lets you compare the gap against either the full candle range or only the candle body. - Maximum Active/Stored FVGs
Controls how many zones remain stored and displayed.
Best use cases
This tool is best used as a context indicator, not as a complete trading system by itself.
It can be useful for:
- Trend pullback analysis
- Intraday continuation setups
- Breakout retest planning
- Structure-based discretionary trading
- Confluence with market structure, support/resistance, order blocks, session levels, or volume
Important note
This script identifies a specific technical condition based on price gaps across a three-candle sequence. It does not predict direction by itself and should not be treated as financial advice or as a guaranteed edge. Use it as one part of a broader decision process.
Skrypt open-source
W zgodzie z duchem TradingView twórca tego skryptu udostępnił go jako open-source, aby użytkownicy mogli przejrzeć i zweryfikować jego działanie. Ukłony dla autora. Korzystanie jest bezpłatne, jednak ponowna publikacja kodu podlega naszym Zasadom serwisu.
Wyłączenie odpowiedzialności
Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.
Skrypt open-source
W zgodzie z duchem TradingView twórca tego skryptu udostępnił go jako open-source, aby użytkownicy mogli przejrzeć i zweryfikować jego działanie. Ukłony dla autora. Korzystanie jest bezpłatne, jednak ponowna publikacja kodu podlega naszym Zasadom serwisu.
Wyłączenie odpowiedzialności
Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.