FVG Liquidity Strategy

Combines Fair Value Gaps (FVG) and liquidity sweeps for entries. Identify liquidity sweeps then find unmitigated FVG for entries. Works for long and short.

Published · Updated · Methodology: SMC

Part of: Fair Value Gap (FVG)

  • Methodology: SMC
  • Content type: strategy

Indicators used

  • Buy Side and Sell Side Liquidity Indicator
  • Fair Value Gaps (FVG)

Source video

Decoded from: This NEW FVG Liquidity Strategy Is Actually Genius by LuxAlgo — watch the original

Key timestamps:

  • 0:00 - Introduction to FVG and Liquidity
  • 0:20 - Bearish setup conditions
  • 0:35 - Bullish setup conditions
  • 0:45 - Important tip: unmitigated FVG
  • 1:00 - Building the indicator on LuxAlgo Quant
  • 1:45 - Indicator application and trade example
  • 2:00 - Stop loss placement

Strategy overview

A fair value gap is the price imbalance left behind when a move happens too fast for both sides to transact, leaving a zone the market often revisits later. What sets this LuxAlgo entry apart is that it never treats the gap in isolation: the "FVG Liquidity Strategy" pairs fair value gaps with a buy-side and sell-side liquidity map, so an imbalance only earns attention when it sits where resting orders — and therefore price's likely draw — already are. In this framing the gap is the entry-side detail, while liquidity supplies the context that decides whether that gap is worth acting on at all.

The source video, "This NEW FVG Liquidity Strategy Is Actually Genius", pitches the idea as a fresh combination rather than a new indicator, and its "genius" label is the channel's framing of that pairing — not a measured result. LuxAlgo walks through both bullish and bearish versions of the setup and then rebuilds the whole thing as an automatable tool on LuxAlgo Quant, consistent with how the channel usually works: take a discretionary smart-money concept and express it as mechanical, testable rules. The throughline is confluence between two lenses — liquidity for where price is being pulled, the fair value gap for the imbalance to act on — rather than either signal used alone.

Because two SMC ideas are stacked here, the outcome depends entirely on how they are combined: which liquidity counts, which gaps qualify, and how each is filtered as price approaches. This page introduces the concept and the specific angle the video takes; the setup itself is best understood by watching the source and testing the behavior on your own charts before drawing conclusions.

Topics

fvg liquidity strategy · smc strategy · fair value gap · liquidity sweeps · trading strategy · pine script · tradingview strategy · ict trading · price action · fvg trading strategy · market liquidity · institutional trading · order block trading

Frequently asked questions

What is the FVG Liquidity Strategy?

It's a smart-money approach that combines fair value gaps with buy-side and sell-side liquidity zones, reading imbalances in the context of where resting orders sit rather than on their own. The concept comes from a LuxAlgo video that presents the pairing of the two ideas as the core insight.

How is this different from trading fair value gaps by themselves?

A fair value gap on its own only marks an imbalance; adding a liquidity map gives that gap a location and a reason — price tends to be drawn toward liquidity, so a gap that aligns with it carries more context than an isolated one. The strategy's whole premise is confluence between the two, not either signal alone.

What does an "unmitigated" fair value gap mean?

In FVG terminology, an unmitigated (or unfilled) gap is one that price has not yet returned to and "filled." It's a general smart-money concept traders watch because untested imbalances are often treated as areas price may revisit.

Can I test the FVG Liquidity Strategy before trading it?

Yes — the sensible path is to study the concept and backtest it on historical data before risking capital. Strategy Decoder catalogs strategies like this one from their video sources so you can review the idea and evaluate it 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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