A fair value gap is supposed to push price away. When a candle closes straight through it instead, the traders who sold into a bearish gap are now wrong, and many ICT traders expect the same zone to hold from the other side on the way back.
So a bearish gap that is closed through upward is read as a bullish inverse gap, and the trade is a long on the return into it. The same logic runs in reverse for a bullish gap closed through downward.
| Inverse FVG | 1.08540–1.08660 · 12 pips · 50% at 1.08600 |
|---|---|
| Entry (long) | 1.08660 — top of the inverted gap |
| Stop | 1.08520 — 2 pips below the gap (14 pips) |
| Target | 1.08940 — the next high (28 pips) |
| Reward to risk | 2.00R · breaks even at a 33% win rate |
EURUSD prices from the chart above (Inverse fair value gap), entry at 1.08660. At 2.00R, this setup needs to win more than 33% of the time to make money before costs. Try your own levels in the risk/reward calculator.
Traders disagree on how strict the close must be: some need a body close beyond the gap, others a close beyond its midpoint. Some only use inverse gaps after a liquidity sweep, which makes them part of a reversal model rather than a standalone setup.
Wicks through gaps are common. Without a candle closing beyond the gap, the original gap is still in play.
Inversions work best close to where they formed. A gap from days ago that price drifts through means much less.
Both are failed zones that flip, but they are different setups. Tag them separately or their win rates blur together.
A definition does not tell you whether your iFVG trades pay. Your own record does: in the journal, open a trade from MT4 or MT5 and press the key of iFVG under Entry criteria — the most used criteria get keys 1–9.
Reports then show iFVG by itself: trades, win rate without breakeven trades, average R and P&L, and iFVG in each ICT killzone, which is set on every trade by itself. Combinations such as iFVG with another criterion appear once they have 15 trades, so a lucky streak does not look like an edge.
A fair value gap is expected to hold in its own direction. An inverse fair value gap is one that failed — price closed through it — and is now expected to hold in the opposite direction.
It often appears at reversals, especially after a liquidity sweep, but it is not a signal on its own. Most traders combine it with structure and a killzone.
Usually a few pips beyond the far edge of the gap. If price closes back through the gap, the inversion has failed.