Generating Signals with FVG and Liquidity on 15m Charts – Can Anyone Verify My Approach?

[maynardjameskeenan700L]

Hi @joshyattridge

I am new to the SMC concepts and came across this library, it's brilliant work!!

I’m working on a trading strategy that generates signals using Fair Value Gaps (FVG) and liquidity sweeps on 5/15-minute charts, following ICT concepts. My goal is to identify setups where a liquidity sweep precedes an FVG, then wait for a retracement into the FVG zone to enter a trade. I’d appreciate if someone could verify if my signal generation logic is correct and suggest improvements. Here’s my approach:

smc library pulls:
swings = smc.swing_highs_lows(symbol_dfs[symbol], swing_length=10)
fvg = smc.fvg(symbol_dfs[symbol], join_consecutive=True)
liq_signals = smc.liquidity(symbol_dfs[symbol], swings)
htf_levels = smc.previous_high_low(symbol_dfs[symbol], "1D")

Setup Conditions:
Long: Bullish FVG (FVG = 1 at iloc[-2]) + bearish liquidity sweep (Liquidity = -1 in iloc[-30:-2]).
Short: Bearish FVG (FVG = -1 at iloc[-2]) + bullish liquidity sweep (Liquidity = 1 in iloc[-30:-2]).

Entry Rules:
Store the FVG setup in a dictionary (fvg_storage) when the conditions are met.
Wait for a future candle (after iloc[-1] of the setup) to retrace into the FVG zone:
For longs: fvg_bottom < current_low <= fvg_top and green candle (close > open).
For shorts: fvg_bottom <= current_high < fvg_top and red candle (close < open).

1. Signal Generation: Does my approach to generating signals with FVG and liquidity sweeps align with ICT principles? Specifically, is checking FVG at iloc[-2] and liquidity in iloc[-30:-2] a reasonable way to identify setups where a sweep precedes an FVG?
2. Liquidity Window: I’m using iloc[-30:-2] (28 candles) for the liquidity window, but I’ve noticed swing_highs_lows has a 10-candle lag. Should I adjust the window to avoid overlap with the FVG candle (e.g., iloc[-40:-12]), or is my current window fine for practical trading?
3. Verification: Can someone verify if my signals are generating correctly? For example, on a 15m chart, a long signal should trigger after a bearish liquidity sweep, followed by a bullish FVG, and then a retracement into the FVG zone with a green candle. I’ve had issues with premature entries (e.g., buying at peaks), which I’ve tried to address by waiting for a future retracement.
4. Improvements: Are there any additional checks or filters I should consider to make the signals more reliable?
5. I am using 10 as swing_length, I understand that there is future candle dependency so what would be the best swing_length I should use?
6. Is this library suitable for live trading?

Really appreciate your help and looking forward to hear your thoughts on it. Thank you!

[arber1]

heyy contact me at [email protected] to help you because i created that trading bot using this library

[maynardjameskeenan700L]

Just sent you an email.