Combining a 123 Reversal Signal with Ichimoku Trend Filtering

Summary

This system combines a 123 price-reversal rule with an Ichimoku-based directional filter. The reversal component looks for two consecutive closes in one direction alongside stochastic conditions; the Ichimoku component derives levels from recent high-low midpoints. The strategy takes a position only when both components agree and closes positions when their combined signal is neutral. The published defaults include stochastic settings and Ichimoku periods of 9, 26, and 52, with a 26-period displacement.

The document describes the approach and its risks but gives no performance statistics. Its published test settings cover BTC/USDT futures on Binance from October 7 to November 6, 2023, using hourly bars and a 15-minute base period. The narrative suggests stop-loss and money-management additions, but the supplied source does not show an explicit stop-loss rule. Reversal traps, Ichimoku whipsaws in sideways markets, and poorly matched parameters are identified as concerns; backtesting is recommended.

Key ideas

• The system combines a stochastic-filtered 123 reversal signal with an Ichimoku signal.
• It enters only when both components point in the same direction.
• A neutral combined signal closes the current position.
• The published test settings concern BTC/USDT futures, but no test results are reported.
• The prose recommends stop-loss controls that are not explicit in the supplied source.

Tags

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