H3 Liquidity Sweeps and CHoCH Entries with Candle-Based Stops

Summary

This strategy looks for a sweep of the previous three-hour candle’s high or low, then waits for a change of character on the chart’s current timeframe before entering in the opposite direction. A high sweep arms a short setup, while a low sweep arms a long setup. Swing pivots define the levels whose close-through signals a bullish or bearish change of character.

The stop is placed at the current three-hour candle’s low for a long or high for a short, and the profit target is set using a configurable reward-to-risk multiple. The script resets its entry allowance each New York day and permits only one entry per day. It describes the rules and includes implementation code, but provides no backtest evidence. The author’s suggested reward-to-risk setting is not substantiated, and results may depend on chart timeframe and how the script aggregates three-hour candles.

Key ideas

• A breach of the prior three-hour candle’s high arms a short setup, while a breach of its low arms a long setup.
• Entry requires a close through the latest confirmed swing level on the current chart timeframe.
• The current three-hour candle’s opposite extreme defines the stop, with the target based on a configurable reward-to-risk multiple.
• The strategy allows at most one entry per New York day and clears pending setup states when a new three-hour candle starts.
• The document provides no reported performance testing or evidence that its suggested reward-to-risk setting is reliable.

Tags

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