Fair Value Gap strategyvsStochastic %K/%D reversion strategy
Fair Value Gap strategy: Buy the imbalance bar of a fresh bullish FVG; short the mirror. Exit when the gap fills. · Stochastic %K/%D reversion strategy: Buy a slow stochastic %K cross above %D inside the oversold zone, exit on the mirror.
Fair Value Gap strategy
Buy the imbalance bar of a fresh bullish FVG; short the mirror. Exit when the gap fills.
Stochastic %K/%D reversion strategy
Buy a slow stochastic %K cross above %D inside the oversold zone, exit on the mirror.
Indicators
- Fair Value Gap (min gap 0.1%)
- Slow Stochastic (period 14, smooth 3)
Timeframes
Bias
Long & short
Long only
Market fit
Range-bound
Range-bound
Entry rules
- Long on the bar a bullish FVG opens (bull_signal > 0).
- Short on a bearish FVG.
- %K crosses above %D AND
- Both lines are inside the oversold zone (%K < 30).
Exit rules
- Position closes the bar the gap is filled (rebalanced).
- 4% trailing stop, 3-bar cooldown.
- %K crosses back below %D, OR %K pushes above 80 (overbought).
- Hard 2.5% stop; 4% take-profit.
Expected behavior
Momentum-into-imbalance — fires on explosive bars, exits when the imbalance reverts. Equity curve is choppy with frequent small trades; works best when price respects imbalances and gives the bot a chance to ride the displacement.
Higher trade frequency than RSI mean reversion and louder noise. Fits range-bound regimes; produces fast small wins and small losses. Trend regimes can be expensive — the oscillator stays pinned for many bars.
Complexity
Which one is right for you?
Derived from the bias, timeframe and indicator profile of each strategy — not a back-test forecast.
When to pick Fair Value Gap strategy
- You expect range-bound — the thesis is "Buy the imbalance bar of a fresh bullish FVG; short the mirror. Exit when the gap fills."
- You want a long & short bot on 5m–4h candles with a balanced rule-set.
- You're comfortable monitoring 1 indicator (Fair Value Gap (min gap 0.1%)).
Buy the imbalance bar of a fresh bullish FVG; short the mirror. Exit when the gap fills.
When to pick Stochastic %K/%D reversion strategy
- You expect range-bound — the thesis is "Buy a slow stochastic %K cross above %D inside the oversold zone, exit on the mirror."
- You want a long-only bot on 5m–1h candles with a balanced rule-set.
- You're comfortable monitoring 1 indicator (Slow Stochastic (period 14, smooth 3)).
Buy a slow stochastic %K cross above %D inside the oversold zone, exit on the mirror.
Fair Value Gap strategy
Buy the imbalance bar of a fresh bullish FVG; short the mirror. Exit when the gap fills.
Stochastic %K/%D reversion strategy
Buy a slow stochastic %K cross above %D inside the oversold zone, exit on the mirror.
Related comparisons
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