Swing Breakouts and Fair Value Gaps with Trend and Risk Filters

Summary

This strategy looks for a close crossing a recent confirmed swing high or low, paired with a recent fair value gap in the same direction. An optional trend filter requires price to be above both a long SMA and EMA for bullish trades, or below both for bearish trades. The script sets a fixed stop distance and a target based on a configurable risk-to-reward multiple, with an optional tick offset on the target and a break-even feature that can move the stop after a chosen reward threshold.

The provided excerpt also tracks whether a trade is active and draws entry, stop, and target guides anchored to the signal bar. Swing points depend on a lookback that requires later bars for confirmation, and the excerpt ends before the complete trade-management and exit logic appears. It gives no backtest outcomes, instrument, timeframe, or transaction-cost assumptions, so the rules describe a testable signal framework rather than demonstrated performance.

Key ideas

• A bullish or bearish entry requires a close to break a recent swing level and a matching recent fair value gap.
• An optional filter checks that price is above or below both a long SMA and EMA.
• Stops use a fixed pip or point distance, while targets scale that risk by a selected reward ratio.
• The break-even option can adjust the stop after the trade reaches a specified reward threshold.
• The excerpt contains no performance results and does not show the complete exit logic.

Tags

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