What is FVG Mitigation?

An FVG represents an imbalance — a price zone the market never traded both sides of during the original move. Over time, markets tend to "rebalance" by returning to these zones and trading them properly. When this happens, the FVG is "mitigated" or "filled."

Three common outcomes when price returns: (1) Partial fill, then continuation — price taps into the FVG, reacts, and resumes the original direction. (2) Full fill, then continuation — price fully closes the FVG and still resumes the original direction. (3) Full fill, then reversal — the original move's premise has failed.

Bullish setup: after a strong bullish move that left an FVG, wait for price to retrace into the FVG. Look for a lower-timeframe reversal signal (bullish engulfing, structure shift). Enter long with stop just past the opposite side of the FVG.

The key context is the higher-timeframe trend. FVG mitigation entries work best when the higher timeframe is clearly trending in the direction of the FVG. In a range or counter-trend retracement, the same FVG may not hold.

If price closes fully through the FVG against the original direction (e.g. a bullish FVG that gets fully filled and price keeps falling), the trade thesis is dead. The market is telling you the original move was not real institutional buying — likely a sweep or weak rally that's now reversing.

This is one of the cleanest invalidation rules in price-action trading: FVG closure beyond the opposite extreme = exit, no questions. The risk-reward becomes negative after this point.