Liquidity Sweeps, Market Structure, and Fair Value Gap Strategy Rules
Summary
This script combines market-structure signals with liquidity sweeps, fair value gaps, and displacement-based zones. It tracks swing highs and lows to identify breaks of structure and changes of character, and flags price moves beyond prior swing or daily levels that close back inside. Fair value gaps are defined by a three-bar price separation filtered by ATR size; zone detection uses a displacement threshold. Optional filters use fast and slow EMAs and a rolling range midpoint to screen for trend and premium or discount conditions.
Entries require configurable combinations of recent sweeps, gap or zone interaction, structure signals, and filters, with options for long or short trades and limiting concurrent positions. Stops may use the signal candle or ATR, while targets use a risk multiple; breakeven and trailing-stop features are optional. The code provides rules and alerts, but the document gives no performance evidence or validation. It should be treated as a research template: signal definitions and execution assumptions need independent review and testing, including the handling of higher-timeframe daily levels.
Key ideas
- Swing points provide reference levels for breaks of structure and changes of character.
- A liquidity sweep is identified when price crosses a swing or prior-day level and closes back through it.
- Fair value gaps are filtered by their size relative to ATR, while displacement moves define potential zones.
- EMA direction and position relative to a rolling range midpoint can filter trade signals.
- Stops, risk-multiple targets, breakeven movement, and trailing exits are configurable, but no results are reported.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.