Candlestick Divergence Signals from New Highs and Lows

Summary

This indicator marks a potential buy signal when a candle makes a lower low than the previous candle but closes at or above the previous close. It marks a potential sell signal when a candle makes a higher high but closes at or below the previous close. The rules identify cases where the price extends beyond the prior range while the closing price fails to confirm that extension in the same direction.

The document describes the signal conditions but provides no performance evidence, exit rules, position sizing, or market context. It also says the indicator has no adjustable inputs, so the thresholds cannot be configured through parameters. These arrows are pattern alerts rather than a complete trading strategy; their usefulness would depend on how they are filtered, entered, and risk-managed, none of which is specified.

Key ideas

• A buy signal occurs when the current candle makes a lower low but closes no lower than the previous close.
• A sell signal occurs when the current candle makes a higher high but closes no higher than the previous close.
• The indicator uses only the relationship between two adjacent candles and has no input parameters.
• The document supplies no testing results, trade management rules, or evidence of profitability.

Tags

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