► Overview:
The Reverse Candle Strategy leverages a customizable moving average to identify the start of a trend. It utilizes the highest and lowest prices to define the trend and its corrections, executing trades based on custom candlestick patterns to capitalize on the main trend's continuation.
► Description:
The Reverse Candle Strategy is designed to effectively identify and trade market trends by combining moving averages and custom candlestick patterns. The core of the strategy is a single, customizable moving average, which helps determine the trend direction. When the market price crosses above the moving average, this signifies the beginning of an uptrend. The strategy then tracks the highest price reached during the uptrend and waits for a correction. A specific custom candlestick pattern signals the end of the correction, at which point the strategy executes a long trade.
In the case of a downtrend, the market price crossing below the moving average marks the trend’s start. The strategy monitors the lowest price during the downtrend and awaits a correction. The end of this correction is identified by another custom candlestick pattern, prompting the strategy to execute a short trade. This combination of a moving average with precise candlestick patterns ensures that trades are made at optimal moments, improving the likelihood of successful trades.
The integration of the moving average and candlestick patterns is critical. The moving average smooths out price data to highlight the trend direction, while the custom candlestick patterns provide specific entry signals after a correction, ensuring the trend’s resumption is genuine. This synergy enhances the strategy’s ability to filter out false signals and improve trade accuracy.
↑ Long Entry Example:
When the price is moving above the moving average and the highest price has been detected, the strategy will wait for the entry candle to execute the long trade.
↓ Short Entry Example:
When the price is moving below the moving average and the lowest price has been detected, the strategy will wait for the entry candle to execute the short trade.
✕ Exit Conditions:
To manage risk effectively, the strategy provides multiple stop-loss options. Traders can set stop-loss levels using fixed pips, ATR-based calculations, or the higher/lower price of past candles. Additionally, trades can be closed if a candle moves against the trade direction. Up to three take-profit levels can be set using fixed pips, ATR, or risk-to-reward ratios, allowing traders to secure profits at different stages. The trailing stop feature adjusts the stop loss as the trade moves into profit, locking in gains while allowing for continued potential upside. Furthermore, a break-even feature moves the stop loss to the entry price once a certain profit level is reached, protecting against losses. Trades can also be closed when the price crosses the moving average.
► Features & Settings:
⚙︎ Moving Average: Users can choose between various types of moving averages (e.g., SMA, EMA) to confirm the trend direction.
⚙︎ Trend & Corrections: Set minimum and maximum pips for trends and corrections, with an option to define correction percentages relative to the trend.
⚙︎ Entry Candle: Define the entry candle by specifying the minimum and maximum size of the candle's body and the ratio of the body to the entire candle size, ensuring significant breakouts trigger trades.
⚙︎ Trading Session: This feature allows users to define specific trading hours during which the strategy should operate, ensuring trades are executed only during preferred market periods.
⚙︎ Trading Days: Users can specify which days the strategy should be active, offering the flexibility to avoid trading on specific days of the week.
⚙︎ Backtesting: Enables a backtesting period during which the strategy can be tested over a selected start and end date. This feature can be deactivated if not needed.
⚙︎ Trades: Configure trade direction (long, short, or both), position sizing (fixed or percentage-based), maximum number of open trades, and daily trade limits.
⚙︎ Trades Exit: Various exit methods, such as setting profit or loss limits, trade duration, or closing trades on moving average crossings.
⚙︎ Stop Loss: Various stop-loss methods are available, including a fixed number of pips, ATR-based, or using the highest or lowest price points within a specified number of previous candles. Additionally, trades can be closed after a specific number of candles move in the opposite direction of the trade.
⚙︎ Break Even: This feature adjusts the stop loss to a break-even point once certain conditions are met, such as reaching predefined profit levels, to protect gains.
⚙︎ Trailing Stop: The trailing stop feature adjusts the stop loss as the trade moves into profit, securing gains while potentially capturing further upside.
⚙︎ Take Profit: up to three take-profit levels using fixed pips, ATR, or risk-to-reward ratios based on the stop loss. Alternatively, specify a set number of candles moving in the trade direction.
⚙︎ Alerts: The strategy includes a comprehensive alert system that informs the user of all significant actions, such as trade openings and closings. It supports placeholders for dynamic values like take-profit levels and stop-loss prices.
⚙︎ Dashboard: Visual display providing detailed information about ongoing and past trades on the chart, helping users monitor performance and make informed decisions.
► Backtesting Details:
Timeframe: 30-minute NAS100 chart
Initial Balance: $10,000
Order Size: 5 Units
Commission: $0.5 per contract
Slippage: 5 ticks
Stop Loss: MA Crossing or by break even
The Reverse Candle Strategy leverages a customizable moving average to identify the start of a trend. It utilizes the highest and lowest prices to define the trend and its corrections, executing trades based on custom candlestick patterns to capitalize on the main trend's continuation.
► Description:
The Reverse Candle Strategy is designed to effectively identify and trade market trends by combining moving averages and custom candlestick patterns. The core of the strategy is a single, customizable moving average, which helps determine the trend direction. When the market price crosses above the moving average, this signifies the beginning of an uptrend. The strategy then tracks the highest price reached during the uptrend and waits for a correction. A specific custom candlestick pattern signals the end of the correction, at which point the strategy executes a long trade.
In the case of a downtrend, the market price crossing below the moving average marks the trend’s start. The strategy monitors the lowest price during the downtrend and awaits a correction. The end of this correction is identified by another custom candlestick pattern, prompting the strategy to execute a short trade. This combination of a moving average with precise candlestick patterns ensures that trades are made at optimal moments, improving the likelihood of successful trades.
The integration of the moving average and candlestick patterns is critical. The moving average smooths out price data to highlight the trend direction, while the custom candlestick patterns provide specific entry signals after a correction, ensuring the trend’s resumption is genuine. This synergy enhances the strategy’s ability to filter out false signals and improve trade accuracy.
↑ Long Entry Example:
When the price is moving above the moving average and the highest price has been detected, the strategy will wait for the entry candle to execute the long trade.
↓ Short Entry Example:
When the price is moving below the moving average and the lowest price has been detected, the strategy will wait for the entry candle to execute the short trade.
✕ Exit Conditions:
To manage risk effectively, the strategy provides multiple stop-loss options. Traders can set stop-loss levels using fixed pips, ATR-based calculations, or the higher/lower price of past candles. Additionally, trades can be closed if a candle moves against the trade direction. Up to three take-profit levels can be set using fixed pips, ATR, or risk-to-reward ratios, allowing traders to secure profits at different stages. The trailing stop feature adjusts the stop loss as the trade moves into profit, locking in gains while allowing for continued potential upside. Furthermore, a break-even feature moves the stop loss to the entry price once a certain profit level is reached, protecting against losses. Trades can also be closed when the price crosses the moving average.
► Features & Settings:
⚙︎ Moving Average: Users can choose between various types of moving averages (e.g., SMA, EMA) to confirm the trend direction.
⚙︎ Trend & Corrections: Set minimum and maximum pips for trends and corrections, with an option to define correction percentages relative to the trend.
⚙︎ Entry Candle: Define the entry candle by specifying the minimum and maximum size of the candle's body and the ratio of the body to the entire candle size, ensuring significant breakouts trigger trades.
⚙︎ Trading Session: This feature allows users to define specific trading hours during which the strategy should operate, ensuring trades are executed only during preferred market periods.
⚙︎ Trading Days: Users can specify which days the strategy should be active, offering the flexibility to avoid trading on specific days of the week.
⚙︎ Backtesting: Enables a backtesting period during which the strategy can be tested over a selected start and end date. This feature can be deactivated if not needed.
⚙︎ Trades: Configure trade direction (long, short, or both), position sizing (fixed or percentage-based), maximum number of open trades, and daily trade limits.
⚙︎ Trades Exit: Various exit methods, such as setting profit or loss limits, trade duration, or closing trades on moving average crossings.
⚙︎ Stop Loss: Various stop-loss methods are available, including a fixed number of pips, ATR-based, or using the highest or lowest price points within a specified number of previous candles. Additionally, trades can be closed after a specific number of candles move in the opposite direction of the trade.
⚙︎ Break Even: This feature adjusts the stop loss to a break-even point once certain conditions are met, such as reaching predefined profit levels, to protect gains.
⚙︎ Trailing Stop: The trailing stop feature adjusts the stop loss as the trade moves into profit, securing gains while potentially capturing further upside.
⚙︎ Take Profit: up to three take-profit levels using fixed pips, ATR, or risk-to-reward ratios based on the stop loss. Alternatively, specify a set number of candles moving in the trade direction.
⚙︎ Alerts: The strategy includes a comprehensive alert system that informs the user of all significant actions, such as trade openings and closings. It supports placeholders for dynamic values like take-profit levels and stop-loss prices.
⚙︎ Dashboard: Visual display providing detailed information about ongoing and past trades on the chart, helping users monitor performance and make informed decisions.
► Backtesting Details:
Timeframe: 30-minute NAS100 chart
Initial Balance: $10,000
Order Size: 5 Units
Commission: $0.5 per contract
Slippage: 5 ticks
Stop Loss: MA Crossing or by break even