Fair Value Gap Entries Confirmed by Breaks of Market Structure

Summary

This strategy combines swing-based breaks of structure with fair value gaps. It records recent swing highs and lows, treats a confirmed close beyond one as a directional break, and looks for a same-direction gap formed within a specified bar window. A long entry is considered when price retraces into a bullish gap and closes above its lower boundary; the short rule mirrors this around a bearish gap. Entries require a confirmed bar and no open position. Stops sit beyond the gap with an ATR-based buffer, while targets are set using an ATR multiple.

The script specifies lookback and expiry settings, a commission assumption, and position sizing as a percentage of equity, but the document provides no backtest period, asset, or performance report. It therefore describes a rule set rather than evidence that it works. Pivot confirmation can introduce delay, and the approach may be sensitive to chart interval, gap definitions, and execution around retracements; these effects are not evaluated in the supplied material.

Key ideas

• Swing highs and lows define levels whose confirmed breaks establish directional context.
• Fair value gaps are eligible when they form in the same direction within a limited bar window after a break.
• Entries require price to retrace into a valid gap and close within its specified boundary conditions.
• ATR sets the stop buffer and target distance.
• The script gives trading rules but no backtest evidence or asset-specific evaluation.

Tags

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