From FVG to iFVG
Quick recap: an FVG is a three-candle imbalance — a hole where price moved so fast that the middle candle's neighbours never overlap (full guide). Normal behaviour is a partial fill and a reaction in the gap's original direction. The INVERSION happens when a candle closes fully beyond the far side of the gap: a bearish FVG closed above becomes bullish support; a bullish FVG closed below becomes bearish resistance.
The close matters — a wick poking through the gap is a fill attempt, not an inversion. Same close-versus-wick discipline as everywhere else on this site.
Why the flip works
The traders who sold the bearish gap (correctly, by the playbook) are now trapped by the close above it; their exits are buys on any return. Meanwhile the displacement that inverted the gap left its own fresh imbalance behind. The retest of the inverted zone is where both flows meet — trapped exits plus continuation entries — which is why iFVG retests behave like small breaker retests.
Grading an iFVG
Best ones share four traits: the original gap was meaningful (born of real displacement, decent size vs ATR — micro-gaps invert meaninglessly); the inversion candle itself displaced (body-dominant, expanded); the flip happened at a location that matters (a level, a session extreme, inside a discount in an uptrend); and the retest is first touch. An iFVG that ticks all four boxes and agrees with the higher-timeframe trend is a legitimate A-setup.
Trading the retest
Entry at the returned touch of the inverted gap — commonly the gap's midpoint acts as the decision line — with a lower-timeframe rejection as trigger. Stop beyond the gap's far side plus buffer: a full close back through un-inverts the story. Targets: the liquidity in the new direction. On the XAUUSD live chart the FVG engine tracks each gap's lifecycle (fresh, partial, consequent-encroachment, filled) so inversion candidates are easy to spot the moment a close violates a tracked gap; pair with displacement to grade them. Nothing here is financial advice.
FAQ
What turns an FVG into an inversion FVG?
A candle CLOSE fully beyond the far edge of the gap. Wick penetration or partial fills leave it a normal FVG. After the close, the gap's role flips: bearish gaps become support, bullish gaps become resistance.
Are iFVGs reliable on gold?
Graded ones — real displacement origin, displacing inversion, sensible location, first retest — trade like small breaker blocks and are respectable. Inverting every micro-gap on the 1 min chart is noise trading with extra vocabulary.
Where is the entry on an iFVG setup?
The first return to the inverted gap, often at its midpoint, confirmed by a lower-timeframe rejection; stop beyond the far edge. If price closes back through the whole gap, the inversion failed — exit without debate.
ⓘ See these ideas on real price: open the free XAUUSD live chart.