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FVG Trailing Stop

By LuxAlgoJun 4, 2025

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The FVG Trailing Stop turns unfilled imbalances into an adaptive exit line. Every new FVG contributes the extremity farthest from price (the bottom of an upward gap, the top of a downward one) and a fixed number of these unmitigated levels are averaged per direction, then smoothed into a trailing stop that follows the trend.

How to Trade the FVG Trailing Stop?

  • Price above the trailing stop: bearish gaps have been mitigated and conditions read as an uptrend.
  • Price below the trailing stop: bullish gaps have been mitigated; the read flips bearish.
  • Stop touched, average respected: the more transparent directional average underneath holds as support or resistance, a continuation scenario.
  • Stop touched, average crossed: the trend does not shift until price crosses that secondary average; when it does, treat it as a potential reversal.
  • Reset on Cross enabled: a crossed stop disappears into a neutral state and reprints once price resumes its prior direction, a clean cue for re-entries and a filter against false flips.

Among trailing methods, this one is unusual for anchoring to structure: the level moves because gaps get filled, not because price traveled some fixed distance. Once a gap is mitigated it drops out of the calculation and a newer one takes its place, keeping the stop responsive yet smooth.

FVG Trailing Stop Settings

  • Unmitigated FVG Lookback: how many unmitigated gaps feed the calculation; more gaps produce a steadier, more stable stop.
  • Smoothing Length: the simple moving average applied to the raw averages; longer smoothing cuts noise but delays signals.
  • Reset on Cross: enables the neutral state that hides the stop when crossed and redraws it once the trend resumes.

Frequently Asked Questions

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