Reversal 123 and Center of Gravity Signal Strategy

Summary

This strategy combines a Reversal 123 signal with a Center of Gravity channel filter and trades only when both components indicate the same direction. Reversal 123 uses a short price pattern together with smoothed stochastic values relative to a threshold to flag a possible turn. The COG component calculates a linear regression of closing prices and sets signal bands at a chosen percentage offset; price above the selected upper band signals long, while price below the lower band signals short. A setting can reverse the combined direction, and separate toggles control whether long or short entries are enabled.

When the combined signal is neutral, the script closes all open trades. A percentage-based stop loss can optionally be placed from the average position price. The document gives source code and adjustable inputs, but no market, timeframe, backtest settings, or performance results. The explanatory text characterizes the COG as a fair-value corridor, but the code defines offset bands and does not provide evidence that they estimate fair value or improve results. The stop loss is optional, so risk controls depend partly on configuration.

Key ideas

• Trades require Reversal 123 and Center of Gravity signals to agree on direction.
• Reversal 123 combines a short price pattern with smoothed stochastic conditions.
• The COG component uses linear regression and percentage-offset bands to determine direction.
• Neutral combined signals close open positions, and a percentage stop loss is optional.
• The document provides no backtest evidence or performance results.

Tags

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