Indicator Overview
This indicator automatically scans price action to identify liquidity voids, also called Fair Value Gaps (FVGs). These gaps occur when prices make sharp moves that leave previously untested zones. The indicator marks these areas on the chart as coloured rectangles, tracking whether they are later mitigated by price changes.
Background & History
Liquidity voids have been studied in trading for decades, often discussed in institutional trading and smart money concepts. They represent inefficiencies in price delivery where liquidity was insufficient to fill orders. Traders believe these gaps are magnets for future price action, as markets tend to seek balance. By transforming this theory into an automated tool, the Liquidity Void Finder removes subjectivity and saves time.
How the Indicator Works
The Liquidity Void Finder identifies what traders often call Fair Value Gaps (FVGs) — areas on the chart where price moved so quickly that it left untested space between candles. These voids mark points of inefficiency where orders may not have been fully matched. The market has a natural tendency to revisit such areas, making them useful zones for trade planning.
When scanning the chart, the indicator compares the high and low of candles separated by two bars (t and t−2). If the gap between them is larger than a minimum size (in pips or ATR-based), it marks that area as a bullish or bearish void:
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A bullish gap is created when a candle leaves space above the previous candle’s high. This often acts like a demand zone, where the price may return before moving higher.
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A bearish gap is created when a candle leaves space below the previous candle’s low. This often acts like a supply zone, where the price may return before moving lower.
Once a zone is drawn, the indicator continues to monitor it. Traders can choose how a zone is considered “mitigated”:
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Touch rule: Any return into the zone counts as filled.
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Midline rule: Price must reach the middle of the gap.
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Full rule: Price must cover the entire gap.
For practical trading:
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Many traders look for entries when the price first returns to an unmitigated bullish void in an uptrend, expecting the market to bounce higher.
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Conversely, when price revisits a bearish void in a downtrend, traders anticipate a rejection of the lower level.
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These zones can also be used as targets, planning to “fill” an opposite-side gap by adjusting the price.
Because gaps are frequent on smaller timeframes, most traders filter them by requiring larger gaps (via ATR) or only trading those aligned with the higher-timeframe trend.
Key Features
The indicator is designed with flexibility and visual clarity in mind.
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Automatic detection of bullish and bearish liquidity voids.
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Configurable gap size filters using pips or ATR multiples.
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Multiple mitigation rules for different trading styles.
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Adjustable colours, opacity, labels, and extension options.
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Efficient memory management with zone limits.
How to Use it for Trading (at a glance)
The Liquidity Void Finder highlights Fair Value Gaps (FVGs), also known as liquidity voids, where the price has moved so quickly that it has left untested areas on the chart. These zones often act as magnets, with price returning to fill them before continuing in the same direction. Traders can utilise these gaps to identify areas of demand and supply, plan their entries, and set realistic targets.
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Set the context. Use a higher timeframe (H4 or H1) to decide trend direction, then drop to a lower timeframe (M15 or M5) for entries in line with that trend.
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Interpret the zones. Green zones indicate bullish voids (potential demand areas where the price may bounce). Red zones indicate bearish voids (potential areas of supply where the price may reject). Fresh, unmitigated zones carry the most weight.
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Plan entries.
– In an uptrend, look for the price to revisit a bullish void and consider long entries inside the zone. Place stops just below the zone.
– In a downtrend, wait for the price to retest a bearish void and consider short entries inside the zone. Place stops just above the zone.
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Set targets. Use recent swing highs/lows or the next opposite void as profit targets. Partial exits can be taken at the midline of the zone for conservative management.
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Filter signals. Enable ATR filtering or raise the minimum gap size to reduce noise on smaller timeframes. Combine with support, resistance, or momentum indicators for extra confirmation.
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Manage risk. Risk only a small fixed percentage per trade, size positions according to stop distance, and avoid trading zones that have already been mitigated.
Inputs & Parameters
The Liquidity Void Finder features flexible settings that allow for customisation of detection and visualisations.
| Parameter |
Default / Type |
Description |
| Detection |
| Use Wicks |
false (bool) |
Decide whether to use candle wicks or bodies for gap detection. |
| Min Gap, pips |
5.0 (double) |
Minimum gap size in pips to qualify as a void. |
| Use ATR Filter |
false (bool) |
Enable filtering using Average True Range. |
| ATR Period |
14 (int) |
Period used for ATR calculation. |
| Min Gap, ATR |
0.5 (double) |
Minimum gap as a multiple of ATR. |
| Mitigation |
| Mitigation Rule |
Touch (enum) |
Define how a zone is considered filled: Touch, Midline, or Full. |
| Visual |
| Bullish Color |
MediumSeaGreen (string) |
Fill colour for bullish gaps. |
| Bearish Color |
Tomato (string) |
Fill colour for bearish gaps. |
| Opacity Percent |
20 (int) |
Transparency of zone shading. |
| Border Thickness |
1 (int) |
Outline the thickness of zone rectangles. |
| Show Labels |
true (bool) |
Show “FVG up” or “FVG down” labels on the chart. |
| Label Text Colour |
White (string) |
Font colour for zone labels. |
| Label Size |
10 (int) |
Font size for zone labels. |
| Extend Zones |
true (bool) |
Extend the zone rectangles to the right until mitigation or the limit is reached. |
| Max Extend Bars |
20 (int) |
Maximum bars to extend zones. |
| Limits |
| Max Zones |
300 (int) |
Maximum number of zones displayed at once. |
Formula
The Liquidity Void Finder detects Fair Value Gaps by comparing bars at t and t−2. When a bullish or bearish gap exceeds a minimum threshold in pips or ATR, it creates a zone between the two bar extremes and then tracks mitigation by touch, midline, or full fill.
Pipeline: Price series → Choose bodies or wicks → Compute gaps using bars t and t−2 → Compare to MinGap (pips or ATR) → Create bullish or bearish zone → Extend right up to a limit → Monitor mitigation → Mark zone mitigated or keep active.
Price Basis Selection. If UseWicks is true, use Ht and Lt. Otherwise use candle bodies: BodyHight = max(Ot, Ct), BodyLowt = min(Ot, Ct). Define High* and Low* as either wicks or bodies per the setting.
Bullish Gap Condition. Gapup(t) = Low*t − High*t−2. If Gapup(t) ≥ MinGap, create a bullish zone with Top = High*t−2 and Bottom = Low*t.
Bearish Gap Condition. Gapdown(t) = Low*t−2 − High*t. If Gapdown(t) ≥ MinGap, create a bearish zone with Top = Low*t−2 and Bottom = High*t.
Threshold Rule. MinGap = MinGapPips × PipSize when ATR filter is off. If ATR filter is on, MinGap = max( MinGapPips × PipSize , ATRt × MinGapATR ).
Zone Construction. Each zone spans time from bars t−2 to t, with vertical bounds [Bottom, Top]. Zones may be extended to the right up to MaxExtendBars.
Mitigation Criteria. Let mid = (Top + Bottom) ⁄ 2. For a bullish zone at any future bar τ: Touch → Lτ ≤ Top and Hτ ≥ Bottom. Midline → Lτ ≤ mid. Full → Lτ ≤ Bottom. For a bearish zone: Touch → Hτ ≥ Bottom and Lτ ≤ Top. Midline → Hτ ≥ mid. Full → Hτ ≥ Top.
De-duplication. Reject creating a new zone if a non-mitigated zone with the same Top and Bottom (within one pip) exists and its StartTime is within the last 20 bars.
| Symbol |
Meaning |
| Ot, Ct, Ht, Lt |
Open, Close, High, Low at bar t. |
| BodyHight, BodyLowt |
max(Ot, Ct) and min(Ot, Ct). |
| High*, Low* |
Either wicks (H, L) or bodies (BodyHigh, BodyLow) based on UseWicks. |
| MinGapPips, PipSize |
Minimum gap in pips and instrument pip size in price units. |
| ATRt, MinGapATR |
Average True Range at t and ATR multiplier threshold. |
| Gapup(t), Gapdown(t) |
Bullish and bearish gap magnitudes at bar t. |
| Top, Bottom |
Upper and lower price bounds of a detected zone. |
| mid |
Zone midline, (Top + Bottom) ⁄ 2. |
| Mitigation Rule |
One of {Touch, Midline, Full} applied to future bars. |
| MaxExtendBars |
Maximum bars a zone may extend to the right. |
| t, τ |
Detection bar index t and any future bar index τ for mitigation checks. |
Advantages
The indicator gives traders a precise, objective way to identify fair value gaps. It removes the subjectivity of manual drawing, saves time, and highlights areas often targeted by price. With customizable settings and visual clarity, it adapts to different strategies and timeframes.
Disadvantages
Liquidity voids are not guaranteed to be filled, and relying solely on them can lead to false signals. Traders may find too many zones appear on lower timeframes, requiring careful filtering. As with all indicators, it should be combined with other tools and risk management..
How To Install & Remove
First, ensure that you have the cTrader trading platform installed. Then, unzip the file and double-click it to install the platform automatically.
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