Combining Volatility, MACD, and a Candlestick Reversal Filter

Summary

The document proposes screening Chinese equities for three conditions: prior-session amplitude above 1%, MACD crossing above its zero line, and a candlestick pattern the author associates with a morning-star reversal. It interprets high amplitude as evidence of movement, the MACD condition as a positive signal, and the pattern as a possible turn after a decline. The proposed trade is to select stocks matching the combined filter, with the possibility of adding further criteria.

The post includes formula references for a stock-screening platform and sample Python using historical stock data. It reports no backtest results, performance statistics, or validation of the pattern. The supplied code references functions such as REF, CROSS, MACD, and IF without defining them, and the stated pattern logic may not faithfully represent a standard morning star. The author acknowledges that a narrow filter can miss candidates and that trading remains risky; the suggested additions include price-volume and financial measures.

Key ideas

• The screen combines an amplitude threshold, a MACD zero-line crossover, and a named candlestick condition.
• The proposed interpretation is that the filters capture volatility, positive momentum, and a possible reversal.
• The document supplies platform formulas and a Python example but does not report a backtest.
• The sample code uses indicator functions without defining them, so it is not a self-contained implementation.
• The author suggests adding price-volume or financial filters and notes that the screen can miss opportunities.

Tags

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