Equilibrium Price Trend and Reversal Strategy with ATR Risk Controls
Summary
The strategy defines equilibrium as the midpoint between the highest high and lowest low over a lookback window, following the same calculation used for the Ichimoku baseline. It identifies a trend when closing prices remain on one side of equilibrium for a configured run of bars, then looks for an entry on the first move across that level. A reverse mode swaps the direction of trades and reverses the stop and target roles.
Risk controls use a percentile-based ATR measure to set stop and take-profit distances, alongside an exit when price closes too far from equilibrium. The document describes parameters and code logic, but supplies no performance results to show whether the approach is profitable. It warns that sideways markets can produce false signals, slippage can matter during sharp moves, and outcomes may depend on the chosen lookback and trend settings. The settings and exit logic also need careful evaluation across markets and market regimes.
Key ideas
- Equilibrium is calculated as the midpoint of the recent high-low range.
- A consecutive run of closes on one side of equilibrium establishes a trend.
- The first subsequent crossing of equilibrium provides the described entry opportunity.
- A reverse setting swaps trade direction and exchanges stop-loss and take-profit roles.
- ATR-based distances and an equilibrium-deviation exit are intended to manage risk.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.