Counter-Trend Reversal Signals from Consecutive Bars, Volume, and Channels

Summary

This counter-trend strategy looks for possible reversals after consecutive rising or falling bars. It can optionally require rising volume and confirmation from a channel boundary, with a choice between Bollinger Bands and Keltner Channels. Signals are evaluated after bar close, and the source describes entering long or short positions when the corresponding conditions are met. Its default position size is 80% of account equity, with a stated commission assumption of 0.01%.

The document presents the method as a configurable combination of price, volume, and channel information, but includes no reported backtest results. It warns that reversals can fail during strong trends, confirmed entries may come late, and the fixed equity allocation may be aggressive. The source’s detailed conditions should be checked against the prose before use: channel tests and bar-direction conditions determine which reversal setup triggers, and there is no explicit stop-loss or profit-taking rule. Proposed additions include volatility-aware sizing and stops, a trend filter, and explicit exit rules.

Key ideas

• The strategy seeks reversals after a configurable count of rising or falling bars.
• Volume confirmation and Bollinger or Keltner channel conditions can be enabled.
• Signals are acted on after bar confirmation, with source settings allocating 80% of equity per trade.
• The document reports no performance results and describes no explicit stop-loss or take-profit rule.
• Strong trends, delayed confirmation, and aggressive sizing are key risks.

Tags

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