Combining Fair Value Gaps, Momentum Signals, and Trailing Stops

Summary

This strategy generates long and short entries from fair value gap patterns or momentum reversals. The reversal conditions use MACD crossings with RSI thresholds, while the gap conditions compare current price extremes with levels from two bars earlier. A volume filter requires activity above its recent average, and ADX is used to screen for stronger trends. Additional flag conditions combine the gap pattern with price relative to a moving average, although the final entry logic still requires elevated volume and ADX.

Open positions receive a fixed tick-based stop and a trailing exit that activates after price moves a specified distance. Alert messages are provided for entries and exits, and a chart dashboard displays position and indicator readings. The document supplies code and settings but no backtest results or evidence that the signals are profitable. Its title and accompanying description mention other features that are not present in the shown rules, so the visible implementation is the sound basis for understanding the strategy.

Key ideas

• Long and short entries can be triggered by fair value gaps or MACD reversals filtered by RSI.
• The entry rules require volume above its moving average and ADX above a threshold.
• A moving-average and volume condition adds bullish or bearish flag patterns.
• Positions use a fixed stop distance and a trailing exit with configurable activation and offset.
• The document provides no performance evidence, so the strategy’s effectiveness is unestablished.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.