NASDAQ 5m Fair Value Gap Strategy

I have recently tested some things regarding Fair Value Gaps and have found something at least a little bit intriguing

I wont go over what a Fair Value Gap is in this thread but if you do not know about it just use our good friend Google

The rules are as follows:

1. Place a Limit Order into the top (buy) or bottom (sell) of the first 5 Minute Fair Value Gap that gets triggered after Market Open
2. Place your Stop under/over the Candle that contains the FVG or the prior candle (this part may be a bit subjective but sometimes one or the other makes obviously more sense. In 80% of cases I would place it under/over the candle prior to the FVG Candle)
3. Target a 1:2 Risk to Reward
4. We exit 1 hour befor market close if neither TP or SL has been hit

Example from this Monday (14.08.2023):



Now to make it a bit more appetizing for you here are the backtest results for the entier year 2020:



Now the problem is that just using these very basic and non optimized rules we probably wont make a nice profit any more in 2023. So I am asking you to look for solutions in terms of filtering out bad trades. Some examples would be only taking FVG after a certain time, filtering for trend direction, using only midway fills on FVG, not taking a trade on stacked FVG, ...

Get creative

Have a nice day and good trades!

PS: I just blindly backtest 2020 mechanicly. I have been trading for some years and have very good understanding of market structure and elliot wave principle. If I had taken the trades according to my knowledge I believe I could have gotten the PF up to over 3

Cool

can you provide more data?
even a pine for the fvg you're using ?
also confirm the timezone (on your screenshot I see 15:30 that would mean 9:30 NY ?)

Why not?

There's the OTE, Order Block, etc etc
Plenty of tools given by Mike.

9/30 NY Time is correct. No matter which time zone you are in I think the Open of the Nasdaq should be simple to identify for anybody. I like the simplicity. Obviously I did not take Set Ups that occured right befor the close since there is no volume there.

No I dont have a code or anything of the sort.

Because I have tested it.

Thats what I meant with the basic strategy can be wastly improved.

testing this on EURUSD so far looks really good 5-0

I asked about the timezone just in case it could have been 9/30 London on nasdaq futures .

about the script the fvg ss you provided was manual ?

Any creative ideas to share so far??

Great job !, I use a similar approach, I combine FVG with AI Lines, when price is under Buy Level 1, I trade only Buy FVGs, my take profit is the pivot line of the indicator, my stop loss is 20 pips below the FVG