Candlestick Body Reversals with Adjustable Price Thresholds

Summary

This strategy seeks reversal signals by comparing recent closing prices with earlier candle-body levels. It defines each candle’s body using its open and close, then calculates a resistance measure from the body relative to the full high–low range. A buy requires two successive upward crossovers, adjusted by a configurable delta, plus resistance above a buy threshold. A sell requires two downward crossovers with a complementary delta adjustment and resistance below a sell threshold. Sell signals close the long position; the rules do not open short positions.

The script provides adjustable delta and resistance thresholds, and its description presents this as an hourly-oriented version of a simpler strategy, recommending it for selected multi-hour and daily charts. The source gives no performance results or validation evidence. The formula divides by candle body size, so doji-like candles may create problematic values; the document also does not explain how to select parameters or manage position risk.

Key ideas

• The strategy uses consecutive price crossovers of prior candle-body levels to identify possible reversals.
• A buy signal also requires the candle resistance measure to exceed a configurable threshold.
• A sell signal closes an existing long position rather than opening a short position.
• The delta and resistance thresholds can be adjusted, but the document provides no validation results.

Tags

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