Combining Reversal Patterns with a Center of Gravity Filter

Summary

This strategy combines a Reversal 123 signal with a Center of Gravity filter. The reversal component looks for a three-bar price pattern alongside the relationship between smoothed fast and slow Stochastic values. The COG component uses linear regression with configurable percentage bands; its directional state changes when price moves beyond a selected band. A trade is signaled only when both components agree, with optional direction reversal and independent switches for long and short trades.

When the combined signal becomes neutral, the script closes open positions. Users can also enable percentage-based stop orders. The document describes the indicator rules and configurable inputs, but reports no backtest results, tested market, or evidence of profitability. The signal definitions and defaults alone do not establish that the combination predicts reversals reliably, and the stop loss is disabled by default.

Key ideas

• The Reversal 123 component combines a three-bar price pattern with smoothed Stochastic conditions.
• The COG filter tracks a linear regression level with configurable percentage bands.
• Trades require both components to signal the same direction.
• A neutral combined signal closes the position, while percentage stops are optional.
• The document provides no performance evidence or market-specific validation.

Tags

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