Candle Reversal Signals Around an Eight-Period Triangular Average

Summary

This indicator defines bullish and bearish candle signals using an eight-period triangular moving average calculated on opening prices. A bullish setup requires an upward candle with its open and close above the average, while the low dips beneath it. The lower shadow must exceed the candle body, the upper shadow is capped at two pips, and the body must be at least three pips. The sell setup mirrors these conditions below the average, with the upper shadow extending above it.

The code marks qualifying bars with separate buy and sell outputs. The rules combine average-based location, candle direction, wick shape, and minimum body size to identify particular rejection patterns. The document does not specify an entry after the signal, stop placement, position sizing, exit logic, market or timeframe suitability, or backtest evidence. It is therefore a signal definition rather than a complete trading strategy, and the fixed pip thresholds may not transfer consistently across instruments.

Key ideas

• The indicator uses an eight-period triangular moving average of opening prices as its reference.
• A buy signal requires a bullish candle above the average whose low crosses below it.
• The buy candle must have a lower shadow longer than its body and a small upper shadow.
• The sell criteria mirror the bullish conditions below the average.
• No trade management rules or backtest results are provided.

Tags

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