Fair Value Gaps, Smart Money Concepts

Learn to trade Fair Value Gaps (FVG) and Smart Money Concepts (SMC) in Forex using the LuxAlgo indicator, focusing on refining entries with the 50% FVG level. T

Published · Updated · Methodology: ICT

Part of: Fair Value Gap (FVG)

  • Methodology: ICT
  • Content type: strategy
  • Timeframes: Low time frame (for entry refinement)
  • Markets: Forex

Indicators used

  • Smart Money Concepts by Lux Algo

Source video

Decoded from: Highly Powerful Fair Value Gaps Forex Strategy - ICT Smart Money Concepts 🔥 by LuxAlgo — watch the original

Key timestamps:

  • 0:00 - Introduction to Fair Value Gaps
  • 0:08 - LuxAlgo Smart Money Concepts indicator settings
  • 0:18 - Using FVG as a target
  • 0:25 - Entry using bullish FVG and lower timeframe
  • 0:34 - Optimal entry at 50% FVG level

Strategy overview

A fair value gap (FVG) is the price imbalance left behind when a move trades through a zone too quickly for both buyers and sellers to transact, leaving a gap that price often returns to fill. This entry decodes a LuxAlgo video that builds its whole approach around the channel's own Smart Money Concepts indicator, which detects and plots these gaps automatically instead of asking the trader to mark them candle by candle.

What sets this version apart is that it treats the gap in two roles at once. The video first uses an FVG as a target — a destination price is likely to be drawn toward — and then uses a fresh gap as the reference for entry, dropping to a lower timeframe to refine timing as price approaches. The emphasis lands on the 50% level of the gap: the midpoint the source frames as the optimal entry rather than the gap's outer edge, treating the middle of the imbalance as its point of equilibrium.

Because the setup leans on an indicator to define the zones, the practical questions shift from "how do I spot the gap" to how the tool is configured and how a higher-timeframe target is reconciled with a lower-timeframe entry. This page pairs the core concept with the source video, "Highly Powerful Fair Value Gaps Forex Strategy - ICT Smart Money Concepts", so you can follow how LuxAlgo frames the setup before testing the idea yourself.

Topics

fair value gaps · smart money concepts · ict trading · pine script · tradingview strategy · forex strategy · trading strategy · fvg trading strategy · scalping strategy · price action · luxalgo · low time frame trading · currency trading

Frequently asked questions

What is a fair value gap (FVG) in ICT trading?

A fair value gap is a price imbalance created when a fast move leaves a range that neither buyers nor sellers fully transacted in. ICT traders watch these gaps because price frequently returns to "fill" them, which makes them useful reference zones for both targets and entries.

How does this LuxAlgo strategy use fair value gaps?

The source video uses the gap in two ways — as a target that price is likely to move toward, and as an entry zone once a fresh gap forms — and relies on LuxAlgo's Smart Money Concepts indicator to detect and plot the gaps automatically rather than by hand.

What is the 50% fair value gap level?

It is the midpoint of the gap, halfway between its high and low. The video frames this equilibrium level as the optimal entry point rather than the gap's outer edge, using a lower timeframe to refine the timing once price reaches it.

How can I test a fair value gap strategy before trading it?

Backtest it on historical data and watch how price actually reacts to the gaps on your own chart. Strategy Decoder extracts strategy concepts like this one from video sources so you can study and test them on TradingView.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

Strategy Decoder catalogs 2,229 decoded strategies. Each one is extracted with confidence scoring, cross-linked to the indicators it uses, and kept up to date as new videos are processed daily. Load this page with JavaScript enabled to use the interactive tools, or start from the strategy explorer to filter by methodology, market and timeframe.

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