JJ Simon’s Fair Value Theory is built on a straightforward market premise: when no new information is available for the market to price in, price is likely to revert toward a reference point known as “fair value.” For the NQ, Nasdaq-100 futures, JJ has identified two price levels that consistently act as fair value: the 9:30 AM market open price and the 2:00 PM NY afternoon price. The strategy is traded exclusively on the 1-minute chart during two New York sessions: 9:30-11:00 AM and 2:00-3:00 PM.
Each trade window follows a two-phase approach. In the first 10-15 minutes, traders look for continuation moves, with price pushing away from fair value with momentum. For the remainder of the window, the focus shifts to mean-reversion setups, with price returning back toward the fair value reference level. All entries require the same two-condition trigger: a Market Structure Break, MSB, or Break of Structure, BOS, confirmed by a strong displacement candle. Once entered, trades target a fixed 1.5R with no active trade management.
How the strategy works
Entry setup and conditions
A valid entry requires two things to occur together: a confirmed structure break and a qualifying displacement candle. A BOS, Break of Structure, signals trend continuation, while an MSB, Market Structure Break, signals a potential trend reversal. Both can be used as entry triggers depending on the phase of the trade window.
A displacement candle must close decisively, with a counter-wick measuring less than 20% of the distance from the candle’s open to the counter-wick high or low. Use Fibonacci settings 0, 0.2, and 1 to measure this. If either condition is absent, the trade quality is reduced and the setup should be skipped.
Stop loss, take profit, and position sizing
Stop loss distance is determined by the current Average True Range, ATR, to account for changing market volatility. The take profit is always set at 1.5R, with no trade management and no partial exits. Using 1, 2, or 3 NQ contracts at the appropriate ATR tier equates to approximately $1,000 of risk per trade, with one NQ point equal to $20.
