Big-Body Candle Momentum Entries with ATR Trailing Stops

Summary

This strategy enters long or short when a candle closes in one direction and its body exceeds a multiple of the recent average candle body. The threshold is adjustable, with a stated default of four times the average. Entries are taken only when the strategy is flat and the candle is confirmed, so it waits for unusually large directional bars rather than trading every move.

After entry, the strategy sets a stop using ATR and trails it as price advances: the long stop can rise, while the short stop can fall. The stated defaults use a 14-period ATR and a factor of two. The document provides the script rules and parameter defaults, but no backtest results or market-specific evidence. Its description claims the size filter can avoid choppy conditions, but that claim is not demonstrated here. The averaging loop covers 21 indexed bars while dividing by 20, a detail that may affect the threshold calculation; the stop behavior and performance also require independent testing across instruments and timeframes.

Key ideas

• Entries require a confirmed bullish or bearish candle whose body exceeds the recent average body by a configurable multiple.
• The strategy opens a position only when it is flat.
• An ATR-based stop begins relative to the average entry price and trails in the favorable direction.
• The script states defaults of four times the average body, a 14-period ATR, and a two-times ATR stop factor.
• No performance results are supplied, and the body-average calculation should be checked before relying on it.

Tags

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