Combining Stochastic 123 Reversals with Period High-Low Levels

Summary

This script combines a stochastic-based reversal signal with levels drawn from a selected timeframe’s high and low. The reversal component looks for a two-step change in closing-price direction and checks the relationship between fast and slow stochastic values around a configurable threshold. A second component references the high and low from a selected period, with a lookback shift to choose the current or a prior period. The combined strategy opens a long or short only when both components point in the same direction; otherwise, it closes open positions. A reverse-trade option can invert the combined direction.

The script exposes stochastic and timeframe settings, but the document supplies no market-specific backtest configuration or performance results. Its description calls the first component a contrarian system, while the code’s precise behavior depends on the stochastic settings and the combined level filter. The high-low logic is a broad positional check against selected-period levels, not a separate confirmation that a breakout has failed. The source is presented for educational use, so its signals should be independently reviewed and evaluated before practical use.

Key ideas

• The strategy requires agreement between a stochastic reversal signal and a selected-period high-low signal.
• The reversal component checks two consecutive changes in closing-price direction alongside fast and slow stochastic values.
• The high-low component uses configurable timeframe levels and a lookback shift.
• If the combined signal is neutral, the script closes open positions; an option can reverse directional signals.
• No market-specific performance evidence is supplied.

Tags

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