Anti-SMT + FVG Signal

Made by Laila

Anti-SMT + FVG Strategy
A contrarian price-action strategy that combines SMT illusion with Fair Value Gap (FVG) confirmation and multiple filters.

Strategy Concept
This strategy challenges traditional SMT divergence logic. Instead of entering trades based on expected SMT divergence between correlated pairs (e.g., EURUSD and DXY), it assumes the divergence is false and will reverse. The concept is to take advantage of these false signals, also known as "SMT illusions."

To confirm the setup, the strategy integrates Fair Value Gaps (FVGs), which are price imbalances left unfilled between candle 1 and 3.

Anti-SMT Logic
Short Entry:

EURUSD makes a new high (Candle 1)

DXY does not make a new low

Long Entry:

EURUSD makes a new low (Candle 1)

DXY does not make a new high

This divergence is considered false, and the strategy expects a reversal.

Fair Value Gap (FVG) Confirmation
A trade is only triggered if the price touches a Fair Value Gap during:

Candle 1 (the candle that forms the SMT illusion), or

Candle 2 (entry confirmation)

This helps avoid low-quality setups and increases entry precision.

Additional Filters
To improve robustness and prevent overfitting, the strategy includes:

EMA Trend Filter:

Long entries are allowed only if price is above the 50 EMA

Short entries are allowed only if price is below the 50 EMA

Time Filter:

Trades are only permitted between 08:00 and 18:00 UTC

Cooldown Filter:

A minimum of 10 candles between trades is required to prevent overtrading

Strategy Parameters and Defaults
Optimized for EURUSD on the 4-hour (4H) timeframe

Includes realistic commission and slippage

Uses conservative position sizing (e.g., 1% per trade)

Backtesting over hundreds of trades shows approximately 57% win rate under default conditions

These results are historical and do not guarantee future performance

Purpose and Value
This strategy offers a structured and logical approach to contrarian trading by:

Introducing the concept of false SMT divergence

Using price inefficiencies (FVGs) as confirmation

Filtering trades with realistic and widely accepted conditions

Encouraging quality over quantity through strict entry rules

It is not a simple mashup but a well-defined trading system that blends institutional concepts in a usable framework.