Four-Candle FVG Reversals with EMA Bias and Risk Controls

Summary

This strategy looks for four-candle fair value gap reversals, using a 50-period EMA to filter trade direction. A setup combines an initial gap, a liquidity sweep and retracement, then a confirming candle that reverses the gap. The document describes longs and shorts, stop placement around a setup candle’s extreme, a configurable risk-to-reward target, and an optional rule to move the stop to entry after price reaches a chosen reward multiple. Time-window and pattern exception settings can loosen or constrain the signals.

The document claims strong results in trending markets and reports win-rate, reward-to-risk, and drawdown figures, but gives no detailed performance tables or enough information to assess the tests. It provides backtest settings for ETH/USDT futures over a short stated interval, while the narrative’s claimed figures are not tied clearly to that run. The author warns that sideways conditions can produce poor signals and that consecutive losses remain possible. The strategy’s sensitivity to candle definitions, EMA bias selection, session filters, and backtest assumptions calls for independent testing before use.

Key ideas

• The setup uses four candles to identify a fair value gap, liquidity sweep, and reversal confirmation.
• A 50-period EMA filters longs and shorts according to trend bias, with an option to choose which setup candle is checked.
• Stops are placed near a setup candle’s high or low, and targets are set as a multiple of the stop distance.
• An optional break-even rule moves the stop to entry after price reaches a configured reward multiple.
• The document gives performance claims but limited supporting detail, and warns that choppy markets and consecutive losses are risks.

Tags

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