IFVG Trading model

Built For

Instruments: Futures
Trading Style: Day Trading

Playbook Overview‍

This strategy is built around the idea that when price sweeps liquidity and aggressively displaces through a Fair Value Gap (FVG) in the opposite direction, it often signals the start of a directional move. The IFVG model identifies these moments of reversal by combining key ICT concepts: SMT divergence and IFVGs after a liquidity event. It is a high-probability, rule-based intraday strategy best applied to correlated assets, most effectively used on NQ and ES during the New York session.

Core Concepts

To fully understand how the IFVG model works, it’s important to first grasp the two key concepts it relies on: Inverse Fair Value Gaps (IFVGs) and SMT Divergence. These tools help identify when the market may be reversing direction with high probability.

Inverse Fair Value Gap (IFVG)

A Fair Value Gap (FVG) forms when there’s a gap between the wicks of three consecutive candles, usually due to aggressive buying or selling that leaves behind an imbalance. In traditional ICT theory, FVGs are seen as areas where price may return to “rebalance” before continuing in the original direction.

An Inverse Fair Value Gap setup flips this concept.

In the IFVG model, you’re looking for:

• A liquidity sweep - price runs stops above a high or below a low.
• Then, price displaces strongly in the opposite direction, breaking through an existing FVG instead of respecting it.
• This inversion (breaking cleanly through the FVG) suggests the market is no longer interested in rebalancing, it’s shifting direction.

This shift is often the early signal of a larger move, and the IFVG becomes your entry trigger after confirmation.

SMT Divergence

SMT Divergence refers to when two correlated instruments diverge - revealing a hidden clue about true direction or liquidity being engineered.

SMT Divergence happens when:

• Two correlated assets (e.g. ES & NQ, SPY & QQQ, EURUSD and GBPUSD) behave differently at key levels.
• One makes a higher high (or lower low), while the other fails to - signaling divergence.

Let's say you're trading NQ and watching ES as confirmation.

• NQ sweeps a low, making a lower low.
• ES does not — it holds its previous low (a higher low).

This shows SMT Bullish Divergence, smart money likely swept NQ liquidity while holding ES. This makes your IFVG Long much higher probability.

Setup Overview

Symbols: NQ and ES. These correlated futures instruments are used together to spot SMT divergence and execute high-probability trades.‍

Timeframes: Use the 1-minute, 2-minute, 3-minute, or 5-minute chart for precision entries. Higher timeframes like the 1-hour and 4-hour are used only for directional bias and liquidity targets.‍

Sessions: New York Session only. The model is designed to be used during the NY open (9:30 AM EST onward), when volume, volatility, and liquidity sweeps are most active.

Playbook Rules

Context (Bias Setup)

• Start with a 4H or 1H chart to determine if the price is likely to go up or down.
• Identify draw on liquidity. Are we targeting highs or lows?
• Mark key swing highs/lows and session opens.

Liquidity Sweep

• Price must sweep an obvious internal high/low.
• This should be clear - clean, obvious, market-structure-based liquidity.
• If you get SMT after the sweep, this significantly increases the probability of the inversion setup working.

Formation of FVG

• Look for a clean fair value gap after the sweep.
• Preferably a singular FVG, multiple FVGs in the leg reduce accuracy.

The Inversion (Confirmation)

• Wait for price to close back through the FVG from the opposite direction
• This transforms the FVG into an inverse FVG.

Entry

• Enter on a return to the IFVG (limit or market entry).
• Entry on candle closure through IFVG if there is clear displacement.
• Use the same timeframe for entry as the inversion — e.g, a 3M IFVG needs a 3M close through it.

Take Profit

• First Target = Internal Liquidity (recent high/low).
• Final Target = Major Swing High/Low or Draw on Liquidity.

Breakeven Rule

If the first internal liquidity is hit and no further displacement occurs, assume we're rotating and protect capital.

‍More than one FVG in the move?

Avoid the setup or zoom out, multiple FVGs = uncertainty.

Trade Breakdown

Trade Example 1 (Short Trade)

Liquidity Sweep

Price takes out a previous swing high, triggering a buy-side liquidity grab. This is a key stop-hunt above a known high.

Fair Value Gap (FVG) Formation

A Fair Value Gap (FVG) forms during this aggressive move as price leaves behind an imbalance between the wicks of three consecutive candles.

IFVG Confirmation

Price breaks through the FVG with strong bearish displacement, indicating that the market has rejected the imbalance and momentum is now to the downside. This clean break confirms the IFVG setup.

Entry

Entry is taken on the retest of the FVG from below, where price returns to the IFVG zone before continuing lower.

Stop Loss

Stop is placed just above the IFVG or the high of the candle that created the sweep.

Target

The first target is the next area of sell-side liquidity, marked by the equal lows below. Extended target sits at the demand zone (grey box) where price eventually reacts.

Trade Example 2 (Long Trade)

SMT Divergence‍

At the low of the move, SMT divergence is present — one correlated asset (e.g., ES) makes a lower low, while the other (e.g., NQ) holds higher. This signals a break in correlation and hints at a reversal.

Liquidity Sweep

Price takes out a previous low, triggering a sell-side liquidity grab. Stops are cleared below this low before a sharp reversal.

Fair Value Gap (FVG) Formation

It creates a FVG during the aggressive move down. This gap forms between the wicks of three consecutive candles.

IFVG Confirmation

Price breaks through the FVG to the upside, rejecting the imbalance. This confirms that price is no longer rebalancing — it’s shifting direction. The move qualifies as an IFVG setup.

Entry

Entry is taken on the retest of the IFVG, as price returns to the zone and holds.

Stop Loss

Stop is placed just below the FVG or the swing low created by the sweep.

First target is the internal high. Final target is the buy-side liquidity above the prior high.

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