Consequent encroachment, the 50% mark

Fair Value Gaps

The midpoint has a name

The midpoint of an FVG is nicknamed consequent encroachment, or CE. Many traders treat the CE as the realistic target for a retracement instead of the full gap, since price often reverses right around the middle.

A healthy, common reaction

A retracement that stalls exactly at the CE and reverses is a common, healthy sign. It shows the level had just enough pull to attract orders without needing a full fill.

A trade-off in entry price

Some traders set their limit entry at the CE instead of the near edge of the gap, accepting they might miss shallower pullbacks in exchange for a better average price when it works.