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FXSnipers Quantitative Desk Series

Fair Value Gap Continuation Strategy

Forex • EURUSD, GBPUSD, USDCHF • M15 • SMC
London / New York Overlap
07:00 - 15:00 UTC
Complexity: Advanced
Max Risk 0.5% to 1.0% maximum equity risk per execution.
Target R:R Fixed 1:2 R:R target model with a partial take-profit structure at 1:1.5.
Break-Even Trigger Move stop loss to break-even once price reaches +1R in favor.
Automation Rule-dependent

Pre-Trade Verification Checklist

H1 Bias Identification: Confirm the higher timeframe H1 trend via structural BOS or CHoCH.
M15 FVG Location: Locate an unmitigated 3-candle imbalance zone aligned with H1 direction.
Retracement Check: Ensure price is actively pulling back into the 50% midpoint of the FVG.
Execution & Risk Setup: Calculate position size with stop loss beyond the structural invalidation level.
Trade Management: Manage partial exits at 1.5R and move stop-loss to breakeven at 1R.

Entry Execution Criteria

  1. Establish the H1 directional bias by identifying recent break of structure (BOS) and market structure shift (MSS).
  2. On the M15 timeframe, identify a clean three-candle Fair Value Gap (FVG) formed during a displacement move in the direction of the H1 trend.
  3. Wait for price to retrace into the 50% equilibrium level (or complete fill) of the identified FVG and execute a limit or market order upon a structural confirmation print.

Take-Profit & Target Exit

  • Take Profit 1 (TP1) set at nearest external liquidity pool (recent internal swing high/low) ensuring a minimum 1:2 Risk-to-Reward ratio.
  • Scale out 50% position size at TP1 and trail the remaining position to secure profits.

Invalidation & Emergency Exit

  • Cancel the pending setup if price aggressively pierces and closes beyond the extreme boundary of the FVG prior to a touch.
  • Emergency exit if opposing institutional order flow creates an immediate counter-trend market structure shift on the M15 timeframe.
Stop-Loss Positioning

Placed strictly beyond the origin swing point or the outer boundary of the FVG plus a 2-pip buffer for spread and volatility.

Documented & Formatted by FXSnipers Strategy Lab • fxsnipers.com/strategy-lab/fair-value-gap-continuation
Desk Cheat Sheet Specification v1.0