EMA Trend and Fair Value Gap Imbalance Entry Strategy

Summary

This open-source chart strategy combines a fast and slow exponential moving average trend filter with a three-candle fair value gap and a volume-backed candle imbalance. Long setups require the prior close above both EMAs, a bullish gap of at least the configured tick size, a large bullish candle on above-average volume, and a higher high than the preceding candle. Short setups apply the corresponding bearish conditions. Entries are restricted to a specified UTC-6 morning window and use stop orders near the signal candle's close.

The script also configures fixed-point stops and trailing exit parameters, though their precise behavior depends on the instrument and platform conventions. It provides no reported backtest results or performance analysis, so profitability is not established. The strategy is sensitive to bar timeframe, tick size, session settings, and parameter choices; testing with realistic costs and execution assumptions would be needed to assess it.

Key ideas

• The strategy requires EMA alignment and price location to establish short-term trend direction.
• Fair value gaps are measured across separated candles and filtered by a minimum tick-based size.
• A large directional candle with volume above its recent average serves as an imbalance confirmation.
• Entries require a break of the prior candle's high or low and are limited to a morning time window.
• The published script gives no performance evidence, and results may depend on instrument and execution settings.

Tags

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