What is a Fair Value Gap in Trading? Explained
The trading strategy combines ATR (Average True Range), Moving Averages, and RSI (Relative Strength Index) to identify potential trend changes, manage risk, and generate trade signals. The ATR measures market volatility to set stop-loss orders and take-profit levels. Moving Averages help identify trends, with bullish signals generated when a short-term moving average crosses above a long-term moving average, and bearish signals when it crosses below. The RSI identifies overbought or oversold conditions, with values above 70 suggesting overbought conditions and below 30 indicating oversold conditions. The strategy emphasizes the importance of risk management and backtesting before real trading. The recommended trading pair is EURUSD on an H1 timeframe, with a safety level setting between 1 and 10, where a lower safety level equates to higher profit but greater risk, and vice versa. The optimization results for EURUSD show significant profitability potential but stress the necessity of careful setup and ongoing risk management.