Consequent encroachment (CE)
Also called CE. What it means, how it looks on a gold (XAUUSD) chart, and the mistake most traders make with it.
Consequent encroachment: Consequent encroachment is the 50% level of a fair value gap. ICT treats it as the most important point inside the gap: a strong gap usually holds it on a candle close.
Consequent encroachment on a gold chart
If a bullish gap on gold spans $4,110–$4,122, the CE is $4,116. Price dipping to $4,115 and closing at $4,119 respects the gap; a close at $4,108 says the gap has failed.
How traders use it
Entries are often placed at CE, and a close beyond it is used as a reason to exit early.
Common mistake
Using CE on tiny gaps on the 1-minute chart where the 50% is a few cents away from the edge.
Questions
What does consequent encroachment mean in trading?
Consequent encroachment is the 50% level of a fair value gap. ICT treats it as the most important point inside the gap: a strong gap usually holds it on a candle close.
How is consequent encroachment used on gold (XAUUSD)?
Entries are often placed at CE, and a close beyond it is used as a reason to exit early.
Educational content, not financial advice. Every concept here is a probability, not a guarantee.
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