Fibonacci Levels Combined with Candle Patterns and Statistical Filters

Summary

This strategy builds Fibonacci levels from the highest high and lowest low in a rolling window, then looks for touches or breaks accompanied by a candle direction confirmation. A configurable option enables break entries. It also compares recent candle color sequences with historical sequences, selects the best match above a similarity threshold, and uses the subsequent historical price move as a directional filter.

A second filter derives a median, quartiles, and interquartile range from recent closes, then assigns weighted bullish or bearish signals to median, quartile, and extreme-bound crossings. Entries combine the Fibonacci conditions with the pattern direction; bearish entries additionally require nonzero bearish statistical weight. Exits use either ATR-based or percentage stops, an optional trailing stop, and several partial profit limits. The document supplies implementation details and adjustable parameters, but no backtest results, transaction cost assumptions, or out-of-sample evidence. The many interacting settings require independent validation before drawing conclusions about performance.

Key ideas

• The strategy anchors its Fibonacci levels to a rolling high and low range.
• Entries depend on level touches or breaks with candle direction confirmation.
• Historical candle color sequences provide a similarity-based directional filter.
• Quartile and interquartile calculations weight additional bullish or bearish signals.
• Stops, trailing exits, and staged profit limits are configurable, but performance evidence is absent.

Tags

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