Detecting Three-Candle Bullish Spikes and Tracking Entry-Level Mitigation
Summary
The document describes an indicator for marking a three-candle bullish pattern: a bullish candle, a bearish retracement, and another bullish candle. When detected, the indicator draws a box spanning the pattern’s high and low and plots an entry reference at the middle candle’s open. It stores pattern details, including the entry price and whether the level has been revisited, so each pattern can be tracked over time.
On subsequent ticks, the indicator checks whether price reaches the entry level. If it does, the long projected line is removed and a shorter line is drawn to show where the level was mitigated. Display settings control the colors, widths, line style, and projection length. The article provides implementation snippets and proposes testing on Boom indices, but supplies no performance analysis or evidence that the pattern predicts profitable trades. The bullish and bearish tests use candle direction only, and the method does not specify stop placement, position sizing, or rules for validating a trade.
Key ideas
- The indicator identifies a bullish, bearish, bullish sequence as a candidate spike pattern.
- It draws a range box around the three candles and marks the middle candle’s open as an entry reference.
- Stored pattern data lets the indicator track whether price later returns to that reference level.
- The article provides no backtest evidence or complete trade management rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.