Bullish Hammer Entries Filtered by MACD and Volume

Summary

This strategy combines a bullish hammer candlestick with MACD and rising volume to open long positions. A hammer is defined by a small real body, a long lower shadow, and a limited upper shadow. Entry also requires both MACD lines to be at or below zero and current volume to exceed the previous bar's volume, aiming to identify a reversal while momentum remains weak.

The strategy closes all positions when both MACD lines are above zero and caps position size. It also calculates RSI and moving averages, but they do not drive the stated entry or exit rules; a moving-average crossover stop is defined but unused. The document supplies source code and a brief description, but no backtest results or performance analysis. The rules are therefore a specific, inspectable setup rather than evidence of profitability; the source gives no explicit price stop, and the signal's behavior may vary across markets and timeframes.

Key ideas

• A bullish hammer is the required candlestick pattern for entry.
• The long entry also requires both MACD lines to be nonpositive and volume to rise from the prior bar.
• All positions close when both MACD lines turn positive.
• The script limits position size but does not provide backtest evidence or use its calculated RSI and moving averages in the trading rules.

Tags

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