Leledec Exhaustion Signals for Potential Trend Reversals
Summary
This strategy uses major and minor Leledec exhaustion signals to identify possible local price extremes. Its indicator counts successive comparisons between the current close and a prior close. A major bullish signal follows a sufficiently long sequence of advances when a bearish candle makes a new lookback high; a minor bearish signal follows a sequence of declines when a bullish candle makes a new lookback low. The article describes long entries from major bullish signals and short entries from minor bearish signals, while the source code also exposes separate major and minor display options and configurable counts and lookbacks.
The document presents parameter flexibility, combining the signal with volume or moving averages, and adding stops as possible refinements. It warns of false reversals, missed short-term oscillations, and sensitivity to settings. A BTC/USDT futures backtest window is listed, but no results are supplied. The rules depend on bar patterns and local extremes, so the stated reversal interpretation is a hypothesis rather than evidence of predictive performance; the article does not report validation or risk-adjusted outcomes.
Key ideas
- Leledec counts consecutive close movements relative to an earlier bar to track potential exhaustion.
- A major bullish exhaustion requires a bearish candle at a lookback high after a rising sequence.
- A minor bearish exhaustion requires a bullish candle at a lookback low after a declining sequence.
- False reversals and parameter sensitivity are acknowledged, while the listed futures backtest has no reported results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.