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Glossary

Consequent encroachment

Consequent encroachment is the midpoint of a fair value gap, the price halfway between its top and bottom edge.

By Michael H.. Last updated . Corrections log

Definition

Consequent encroachment is the midpoint of a fair value gap, the price halfway between its top and bottom edge.

Traders watch the midpoint because price reaching it has gone halfway into the gap. The midpoint is simple arithmetic: add the two edges and divide by two.

The term comes from educators who read the gap in halves. Nothing in the rule makes the midpoint special, and a gap does not have to react there.

Some educators call the midpoint a level to watch and some ignore it. This site only states where it is.

On a real chart

EURUSD15 minute2 bullish 4 bearish ยท 6 gaps by the rule
1.119001.120001.1210006:0008:0010:0012:0014:0016:00123456
  1. 1Bearish1.12036 to 1.12084formed 07:30 UTCTraded through at 12:45 UTC
  2. 2Bearish1.12003 to 1.12035formed 07:45 UTCTraded through at 08:15 UTC
  3. 3Bearish1.11939 to 1.11971formed 09:00 UTCTraded through at 09:30 UTC
  4. 4Bullish1.11953 to 1.11975formed 10:00 UTCTraded through at 10:30 UTC
  5. 5Bullish1.11932 to 1.11955formed 12:45 UTCTraded through at 16:15 UTC
  6. 6Bearish1.11964 to 1.11965formed 16:45 UTCTraded through at 16:45 UTC
EURUSD, 23 October 2026, 06:00 to 18:00 UTC. Real candles: Dukascopy 15-minute candles, read 2026-10-31. Fair value gap by the three-candle wick rule, no minimum size. Each box runs from its gap until a later candle trades through its far edge, or to the end of the chart.

EURUSD, 23 October 2026, 15 minute candles, 06:00 to 18:00 UTC. The rule finds 6 gaps in this window. A bearish gap whose third candle opens at 07:15 UTC runs from 1.12036 to 1.12084, a size of 0.00048 in price. Its midpoint is 1.12060, the top plus the bottom, divided by two. A candle opening at 12:45 UTC traded through its far edge, so it is filled.

The window was chosen because it shows the term clearly. It is one chart, and it says nothing about what the next gap will do.

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