SAK-FVG Imbalance Expansion Strategy
Family: trend_following · Regime: trending · Complexity: high · Asset classes: Equities, Forex, Crypto · Timeframes: H1, H4, D1
Thesis
Market price discovery occurs in bursts of imbalance (Fair Value Gaps). These gaps represent true institutional direction only when they occur during a high-volume participation phase (RVOL) and align with both the structural trend (SMA) and the underlying dominant cycle (SAK BandPass). By entering only when price, cycle, and volume converge, we isolate high-probability expansion moves.
Components
- Swiss Army Knife Indicator (SAK) (regime) — Used in BandPass (BP) mode to isolate the dominant cycle. It acts as a regime filter: we only trade when the cyclical momentum (oscillation around zero) aligns with our intended direction.
- SMA3x5+BB - pjdhiro (direction) — Provides the macro-trend direction. By requiring price to be on the correct side of both the 20 and 200 SMAs, we ensure we are trading with the primary and secondary trend.
- FVG Crosscheck (Python Definition) (entry) — Identifies 'displacement'—price gaps that signify an imbalance between buyers and sellers. This is the catalyst for the trade.
- Donchian Channels (exit) — Provides a trailing exit strategy based on market structure. Closing below the N-period low (for longs) captures the trend until a structural break occurs.
- TMA Risk Panel (risk) — Standardizes risk by calculating position size based on equity and setting an ATR-based stop loss to account for current volatility.
- RVOL (Relative Volume) (confirmation) — Confirms the FVG entry. An imbalance is only significant if accompanied by higher-than-average volume, indicating institutional participation.
Known failure conditions
- The FVG occurs during a low-volume period (RVOL < 1.0) and is immediately mitigated.
- SAK BandPass displays high-frequency oscillation (noise) due to delta being too high, leading to false cycle signals.
- Price enters a low-volatility 'squeeze' where Donchian Channels tighten so much that noise triggers the exit.
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