Fair Value Gap Reversals with Moving Average Trend Filters

Summary

This proposed strategy combines fair value gap (FVG) detection, a moving average trend filter, reversal candles, and price-based exits. It describes detecting bullish or bearish gaps on a selected timeframe, defaulting to 60 minutes, then using a 20-period simple moving average to determine direction. A reversal candle that closes beyond the stored gap boundary can trigger an entry when it agrees with the average’s trend signal. Stops are set at a fixed percentage from entry, and targets use a recent high level.

The document lists BTC/USDT futures backtest settings but reports no results. Its description presents a multi-timeframe, adaptive system, while the code’s gap logic updates on timeframe changes and appears to set the gap flag when a gap is found; it does not describe a separate retest requirement. The shared recent-high target for both long and short entries also leaves the short-side exit logic unclear. Conflicting timeframe signals, choppy markets, lag, and parameter sensitivity are noted as limitations.

Key ideas

• The strategy combines timeframe-based FVG detection, a 20-period moving average, and reversal-candle conditions.
• Entries require the reversal signal to agree with the moving-average direction.
• The described stop is percentage-based, while the target is tied to a recent high level.
• The document provides no performance evidence, and its code leaves the short-side target logic unclear.
• Timeframe conflicts, ranging markets, and parameter sensitivity are identified as risks.

Tags

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