Discover Winning Fair Value Gap Strategies With FxMagnetic® FVG Trader

In this tutorial, we will walk you through the process of discovering winning Fair Value Gap trading strategies with FxMagnetic FVG Trader effectively.

You’ll learn essential setup steps, from platform configuration to strategy optimization, and understand how to implement profitable Fair Value Gap -based trading strategies using multiple trading modes and configurations.

This guide breaks down the process into manageable steps: software setup, strategy building, optimization techniques, and autotrader implementation. We’ll also cover crucial aspects of strategy monitoring and portfolio management to help you stay on track.

We created this to help both new and experienced FxMagnetic users effectively utilize FxMagnetic FVG Trader’s features and develop profitable trading strategies.

Initial Setup Checklist

Before beginning any strategy development, access the setup checklist from the download center in your course access section. This document guides the entire setup and optimization process.

To Access Download Center

• Log into your account
• Click Access Course
• Locate Setup Checklist document
• Upon opening the document, click File > Make A Copy
• Save the copy in your own Google Drive
• Use this checklist as your guide as you progress

Important Note: Don’t skip the welcome and bonus downloads section. All promised bonuses and additional resources are available there.

Downloading And Installing FxMagnetic Software

The installation process for any FxMagnetic Software (i.e: Candlestick, RSI, BB, MACD, etc.) is similar. You can read more about it here.

Preparing Historical Data

Sufficient historical data is essential for accurate backtesting and strategy optimization. Without this, the potential of the software and backtesting results will be limited, and we don’t want that.

Chart Preparation

• Open desired trading pair chart.
• Select preferred time frame.
• Turn off auto scroll.
• Press and hold the Home key on your keyboard.
• Wait for data to load to the earliest available date while pressing on the Home button. Doing this action ensures all the historical data is loaded on the chart.
• Once done, re-enable auto scroll.

Pro Tip: Zoom out the chart for faster data loading.

FVG Scanner Setup

Before starting, ensure the FVG Scanner is properly installed in your MT4 platform:

Initial Software Configuration

1. Find FVG Scanner in the Navigator window under Indicators in the MT4 platform.
2. To access, click on View > Navigator
3. Double-click or drag the indicator to chart
4. Input license key
5. For starters, we suggest you choose regular strategy

Understanding FxMagnetic FVG Trader Strategies

FVG Trader strategies use Fair Value Gap (FVG) detection to find price imbalances where rapid directional moves left price ranges with little or no trading, then look for retracements into those gaps as high-probability entry zones. The system scans chosen timeframes for three-candle patterns where clean impulsive moves create gaps, records the gap bounds, filters by size and context (ATR, structure), and triggers entries when price revisits the FVG with confirming signals.

Available Strategies:

• Pullback (Regular, Reverse, Buy Only, Sell Only)
• Pullback + Liquidity Sweep (Regular, Reverse, Buy Only, Sell Only)

Trading Modes Explained

Regular Mode

• Takes both buy and sell trades
• Closes existing trades when opposite signals appear
• Only one trade opens at a time

Reverse Mode

• Takes opposite trades from strategy signals
• Useful for contrarian approaches

Buy/Sell Only Modes

• Trades only in one direction
• Holds until stop loss or take profit

Building Your Trading Strategies

This software gives you the freedom to try hundreds of different settings. However, to get you started in the right direction, here is an example setting you can try.

• We suggest you start out with the Pullback (regular) first.
• For **SL/TP Type,choose ATR 14 which is the dynamic version.
• For additional Trade Filter, choose None.
• Click OK once these are selected.
• This will take you to your chart where you will see this small panel.

Set the following Parameter Ranges:

• In the given example, the optimization will use different combinations of parameters.
• Stop Loss (SL) – from 2.0 to 6.0 with a step of 1.0.
• Example: 2, 3, 4, 5, and 6.
• Take Profit (TP) – from 4.0 to 30.0 with a step of 2.0.
• Example: 4, 6, 8, 10, etc., until it reaches 30.
• Max Bars Since FVG – from 5 to 30 with a step of 5.
• Example: 5, 10, 15, 20, 25, and 30.
• Gap Penetration % – from 10 to 90 with a step of 10.
• Example: 10, 20, 30, etc., until it reaches 90.

You can see more sample settings in this cheat sheet. Understand that this is just the initial step. You are most likely to find better settings that fit your trading style and are far profitable after you optimize.

Optimizing Your Strategy

The optimization process tests thousands of combinations to find the most effective parameters for your strategy.

Preparation

• Close unnecessary charts to improve processing speed. If possible, close other programs running on your computer too.
• Typical duration is 10 to 30 minutes depending on the computer’s power (hence closing other charts or programs).
• The software runs approximately 3,000 or more depending on your settings.
• Set optimization parameters.

Review Results 

The values seen on your chart after the optimization provides an overview of how the strategy’s parameters performed. This alone could help you decide how you will move forward.

• Navigate to File > Open Data Folder > MQL4 > Files
• Open FX Magnetic Flow Scanner Optimization Results folder
• Open the most recent CSV file
• Use filtering to analyze results:
  • Filter by Signal Count (minimum 50)
  • Sort by Return to Drawdown Ratio
  • Review top strategies for viability

Key Metrics to Evaluate:

• Win rate (aim for 45%+ with risk/reward of 2+)
• Total profit and time period
• Maximum drawdown
• Return to drawdown ratio
• Trade frequency
• Maximum consecutive losses

Applying Strategy Templates

Using CSV Results:

1. This is where the magic starts. You can get this via the Export Signals CSV
2. Identify the strategy parameters from your optimization results
3. Note: Symbol, timeframe, strategy type, trade filters
4. Configure Flow Scanner with exact parameters:

• Stop loss and take profit multipliers
• Moving average periods
• Trade filter settings
• Spread configuration

Parameter Application:

• Ensure all settings match exactly: pair, timeframe, strategy mode
• Include spread settings for realistic results
• Verify trade filter parameters and timeframes match

Scanner And AutoTrader Configuration

FVG Autotrader use with FVG Scanner allows you to unleash the automation capability of FxMagnetic, enabling you to speed up your progress in developing a working trading strategy.

Basic Setup

1. Locate FVG Autotrader in Expert Advisors list under Navigator
2. Drag to the same chart where your FVG Scanner is attached
3. Input license key.
4. Select indicator sync mode (recommended default)
5. Manually set a unique magic number for strategy identification (example: 1777, 10, 125, etc.)

Risk Management Settings

• For Money Management Mode, we highly suggest you choose Risk Per Trade (%).
• Set risk per trade (0.25% – 1% recommended). Once set, the software calculates the lot size automatically.
• This starting point gives your account (demo or live) the safety it needs while you are still optimizing your strategy.

Verifying The Setup

Once the setup is done, the auto-trader will print information on the top left corner of the chart.

It is important to understand that the speed of the trading signal output largely depends on your chosen trade parameter setup, i.e.: 5-minute timeframe produces more signals within a day vs. the 4 hour time frame.

Remember that lower time frames often produce low quality signals compared to higher timeframes.

Lastly, if the FVG Autotrader is set up on weekends, it will not print figures. This is normal since the market is closed.

Strategy Monitoring

Proper monitoring ensures strategy effectiveness and helps identify when adjustments are needed.

Performance Metrics

• Monitor consecutive wins/losses
• Track win rate percentage
• Review profit/loss ratios
• Evaluate drawdown levels
• Watch trade frequency

Strategy Validation

• Allow minimum 20-30 trades for statistical significance
• Monitor for three consecutive losses (Potential warning sign if strategy backtest showed 3 consecutive losses in the past)
• Track each strategy’s performance separately
• Compare results against backtest expectations

Strategy Portfolio Management

Building a robust trading portfolio requires careful strategy selection and ongoing management.

Portfolio Development Approach:

1. Start Small: Begin with 2-3 well-tested strategies
2. Gradual Expansion: Add new strategies after proving existing ones
3. Diversification Strategy:
   • Multiple currency pairs
   • Different timeframes
   • Various moving average approaches
   • Different market conditions (trending vs. ranging)

Strategy Evaluation Process:

1. Performance Review: Regular assessment of each strategy’s metrics
2. Lifecycle Management: Remove underperforming strategies, keep successful ones
3. Documentation: Maintain detailed records of each strategy’s performance
4. Optimization Schedule: Regular re-optimization to adapt to changing market conditions

Risk Distribution:

• Never allocate more than 1% risk per strategy initially
• Consider reducing risk per trade if running multiple strategies
• Account for correlation between strategies on same or related pairs

Strategy Rotation Approach:

Rather than seeking one permanent strategy, adopt a dynamic approach:

• Strategies work for weeks to months, not indefinitely
• Market conditions change, requiring strategy adaptation
• Maintain 3-5 active strategies across different pairs/timeframes
• Replace strategies when they exceed consecutive loss limits

Performance Expectations:

• Challenge Timeframes: Expect 1-2 months for typical prop firm challenges
• Skill Development: Strategy management improves with experience
• Realistic Goals: Focus on consistent performance over quick profits
• Continuous Learning: Markets evolve, requiring ongoing adaptation

This tool offers multiple detection modes and parameter configurations that affect trading signals. For detailed explanations of each option and how they work, refer to our configuration guide covering the various trading styles available.

Tips For Success

• Higher time frames mean fewer but better trades – this is how real money is made in trading. The market wants you to overtrade on low time frames, but that’s often where traders lose. In short, quality vs. quantity.
• Be patient with results. Some strategies might need 5 days (or more) before you see your first winning trade. Understand this so you can avoid overtrading.
• Don’t immediately abandon your strategy when market behavior changes.
• A strategy with a high risk to reward ratio usually has long losing streaks, while a strategy with a low risk to reward ratio has less losing streaks. Your aim is to find a system that gives good return while keeping your drawdowns low.
• Never judge multiple strategies by overall account balance. A profitable strategy might be hidden by a losing one – track them separately.
• Think of strategies like a portfolio. When one isn’t performing well, others might cover for it. Start small, master a few strategies first, then gradually expand.
• A 100% win rate strategy does not exist. Keep this in mind so you can avoid over-optimizing. Aim for a strategy that has great stats where the win rate is high enough to be profitable.