FVG Positioning Average [LuxAlgo]

16 Apr

The FVG Positioning Average indicator aims to uncover potential price levels of interest by averaging together recent Fair Value Gap (FVG) initiation levels.

This indicator is grounded in the theory that significant buying or selling activity is the primary catalyst for creating FVGs.

By averaging together the prices where each FVG initiated, we may potentially reveal where major participants are positioned.

🔶 USAGE



By analyzing the average price of bullish or bearish FVGs, users can identify potential support or resistance areas where the larger participants may re-enter or defend their positions.

These areas could be used to adjust entries and exits or assist with risk management such as take-profit or stop-loss levels.

The indicator displays 2 lines, the Bull Average and the Bear Average.

• The Bull Average is only displayed when the price holds above the bull Average.
  
• The Bear Average is only displayed when the price holds below the bear average.
  

When only one average is displayed alone, this level is seen as support or resistance, it is anticipated that this level would be defended for the current trend to stay valid.

When both averages are displayed simultaneously, it can be interpreted as one side attempting to take over the trend.



The movements and reactions during these attempts can be analyzed to provide helpful information about where the price might be headed.

Possible outcomes:

• Trend Confirmation/Re-Entry (From Weak Attempts)
  
• Trend Reversal (Creating Support or Resistance)
  
• Consolidation (Oscillating between/around Bull & Bear Averages)
  

🔶 DETAILS

🔹 Lookback Types

This indicator includes 2 lookback types:

• Bar Count: Uses Bars to determine what data to include. This type can be utilized for averages that are more locally relevant to the current chart data.
  
• FVG Count: Uses a specific # of FVGs for calculations. This type can be utilized for a continuous & consistent view, typically relevant with longer term analysis.
  

Note: When using bar lookback, if no data is in range, no lines will be displayed.

Below is an example of the 'FVG Count' Display.



🔹 Initiation Levels

Initiation Levels are the specific price points where each FVG starts, these are the last points the price was traded at before creating the gap.

• Bull Initiation Level: Lowest Point (Bottom) of FVG
  
• Bear Initiation Level: Highest Point (Top) of FVG
  

🔹 FVG Display

Each FVG being used for the current calculation of averages is displayed on the chart for reference.



Note: If you prefer to not display the FVGs, they can be toggled off in the settings, uncheck "Show FVGs on Chart".

🔶 Settings

• FVG Lookback: As mentioned above in the 'Lookback Types', this sets the number of FVGs or Bars to use for consideration.
  
• Lookback Type: As also mentioned above in 'Lookback Types', this determines the method of lookback to be used.
  
• ATR Multiplier: The FVGs are required to have a Greater Width than (ATR * Multiplier) in order to be used for calculations. This allows you to focus on the data being considered if needed.