Opposite-Candle Failed Reversal Signals with Volume Confirmation
Summary
This script identifies possible failed reversals from two consecutive candles. It signals long when a bearish current candle follows a bullish one, volume exceeds the previous candle’s volume, and the current low stays at or above the previous low. The short setup reverses those conditions: a bullish candle follows a bearish one, volume is higher, and the current high does not exceed the previous high.
Doji-like candles and candles classified as hammers or hanging men are excluded. The script places long or short entries when its conditions occur; the document gives no exit rules, performance results, or market-specific evidence. The pattern is therefore a rule-based signal description rather than evidence that the setup is profitable. Its usefulness would depend on testing across instruments and timeframes, including transaction costs and the behavior of its candle filters.
Key ideas
- A long signal requires an opposite-color candle that does not break the prior candle’s low, with higher volume.
- A short signal requires an opposite-color candle that does not break the prior candle’s high, with higher volume.
- Doji, hammer, and hanging-man classifications suppress signals.
- The script specifies entries but does not describe exits or provide performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.