Bar-Count Countertrend Reversals with Volume and Channel Filters

Summary

This strategy looks for possible reversals after a configurable run of rising or falling closes. A run of falling closes can qualify a long entry, while a run of rising closes can qualify a short entry. Traders can add increasing volume as confirmation and require price to move beyond a selected Bollinger Band or Keltner Channel. The default settings use three bars for each run and enable channel confirmation, while volume confirmation is optional.

Signals and entries are evaluated at bar close, and flags limit repeated signals until the close changes direction. The script’s stated backtest assumptions use 80% of equity per trade and a 0.01% commission, but the document provides no strategy-test results or comparative evidence that these settings work. It has no built-in stop loss or take profit. Channel contact and consecutive-bar counts are heuristic reversal triggers, so results may depend on the instrument, timeframe, and market regime; the accompanying description recommends independent testing and risk controls.

Key ideas

• Consecutive rising and falling closes define candidate countertrend setups.
• Volume confirmation can require volume to rise during the price sequence.
• Bollinger Bands or Keltner Channels can filter entries based on an excursion beyond a band.
• Signals are checked at bar close, with flags limiting repeated entries until a directional reset.
• The strategy has no built-in stop loss or take profit, and the document reports no performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.