FU + SMI Validator (Proper FU, 30m)

Overview

The FU + SMI Validator is a sophisticated technical analysis indicator designed to detect Proper FU (Fakeouts or Liquidity Sweeps) on the 30-minute timeframe. This tool aims to help traders identify high-probability reversal setups that occur when price briefly breaks key levels (sweeping liquidity), then reverses with momentum confirmation.

Fakeouts are common market events where price action “hunts stops” before reversing direction. Correctly identifying these events can offer excellent entry points with defined risk. This indicator combines price action logic with momentum and volatility filters to provide reliable signals.

Core Concepts
Proper FU (Fakeout) Detection

At its core, the script identifies proper fakeouts by checking if the current bar’s price:

For bullish fakeouts: dips below the previous bar’s low (sweeping stops) and then closes above the previous bar’s high

For bearish fakeouts: spikes above the previous bar’s high and then closes below the previous bar’s low

This ensures that the breakout is a true sweep rather than just a one-sided close.

Optionally, the script can require one additional confirmation bar after the FU, ensuring that the momentum is sustained and reducing false signals.

SMI-style Momentum Validation

To improve the quality of signals, the indicator uses a proxy for the Stochastic Momentum Index (SMI) by calculating the difference between current and past linear regression slopes of price. This momentum check helps ensure that fakeouts occur alongside actual directional strength.

Key points:

Momentum must be increasing in the direction of the FU signal.

Momentum filters can be enabled or disabled based on user preference.

Squeeze Condition to Avoid Low-Volatility Traps

The script includes a volatility filter based on a squeeze-like condition:

It compares Bollinger Bands (BB) and Keltner Channels (KC).

When BB bands contract inside KC bands, the market is in a squeeze state, signaling low volatility.

Fakeouts during squeeze conditions are often unreliable; the script can filter these out to reduce false alarms.

Killzone Session Timing Filter

Recognizing that liquidity and volatility vary by session, this tool supports optional filtering for:

London Killzone: 09:00 to 10:30 (UK time)

New York Killzone: 13:00 to 14:30 (UK time)

Signals only trigger during these high-activity windows if enabled, helping traders focus on periods with the best liquidity and market participation.

Note: For Killzone filtering to work accurately, your TradingView chart must be set to the UK timezone.

Features & Benefits

Robust FU detection ensures the breakout price action is meaningful, reducing noise.

Momentum filter via linear regression slope captures trend strength in a smooth, mathematically sound way.

Low-volatility squeeze avoidance helps reduce false signals in choppy or range-bound markets.

Killzone timing filter focuses your attention on the most liquid and active market hours.

Optional confirmation bar increases signal reliability.

Raw FU markers allow visualization of all detected fakeouts for pattern recognition and manual analysis.

Alerts built-in for both valid buy and sell FU setups, enabling real-time notification and quicker decision-making.

Customization Options

Killzone usage: Enable or disable the session timing filter.

Sessions: Configure London and New York killzone time ranges.

Momentum alignment: Enable or disable momentum filter based on SMI proxy.

Volatility filter: Avoid signals during squeeze or low-volatility conditions.

FU confirmation: Option to require one additional confirming candle after the initial FU.

Squeeze and momentum parameters: Adjust Bollinger Bands length and multiplier, Keltner Channel length and ATR multiplier.

Raw FU markers: Show or hide all detected fakeouts regardless of filters.

How to Use This Indicator

Apply to 30-minute charts for forex pairs, indices, cryptocurrencies, or other instruments.

Set your chart timezone to UK time if using Killzone filters.

Adjust input parameters based on your preferred sessions and risk tolerance.

Look for green “VALID BUY FU” labels below bars for bullish fakeout entries.

Look for red “VALID SELL FU” labels above bars for bearish fakeout entries.

Use the alert system to receive notifications on setups.

Combine with your existing analysis or risk management strategy for entries, stops, and profit targets.

Why Use FU + SMI Validator?

Fakeouts are some of the most lucrative but tricky setups for many traders. Without proper filters, they can lead to false entries and losses. This script integrates price action, momentum, volatility, and session timing into one package, providing a robust tool to spot high-quality fakeout opportunities and improve trading confidence.

Limitations

Requires chart to be set to UK timezone for session filters.

Designed specifically for 30-minute timeframe — performance on other timeframes may vary.

Momentum is a proxy, not a direct SMI calculation.

Like all indicators, best used in conjunction with sound risk management and other analysis tools.

Potential Enhancements

Conversion into a full strategy script for backtesting entries and exits.

Addition of other momentum indicators (RSI, MACD) or volume filters.

Customizable time zones or auto time zone detection.

Multi-timeframe analysis capabilities.

Visual dashboard for summary of signal stats.