Multi-Timeframe Engulfing Breakouts with Swing Stops and 1:3 Targets

Summary

This short-term strategy combines a 15-minute trend filter with 5-minute engulfing candles. It defines trend using recent highs and lows, then looks for bullish engulfing candles during an uptrend or bearish engulfing candles during a downtrend. Recent five-bar swing lows or highs set stop levels, and the stated target is three times the stop distance. The document also describes using 2% of account equity per trade and marking signals on the chart.

The source provides Pine Script and backtest settings for ETH/USDT futures on a five-minute interval, covering January to June 2025, but reports no performance results. The prose claims a 1:3 reward-to-risk ratio has a 25% breakeven win rate before costs, which assumes losses and gains match the stated distances. The code recalculates stops and targets from current closes while a position is open, so its behavior may differ from a fixed initial-risk plan. The document flags false signals, slippage, news moves, delayed trend readings, and difficulty reaching fixed targets in some markets.

Key ideas

• The strategy filters five-minute engulfing entries using a trend direction derived from recent 15-minute highs and lows.
• Swing highs and lows provide stop references, while the stated profit target is three times the stop distance.
• The document recommends risking a portion of account equity and notes that slippage and fast market moves can exceed planned losses.
• The backtest configuration is given, but no performance results are reported.

Tags

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