Reversal Signals from Runs of Expanding Candlestick Bodies

Summary

This short strategy description uses consecutive candlestick bars and the growth of their real bodies to generate contrarian signals. A run of N bullish bars, with each bar's body larger than the preceding one, is treated as a sell signal. Conversely, N bearish bars whose bodies expand successively produce a buy signal. The idea is that a sustained, intensifying move may precede a reversal, although the document does not explain why that relationship should hold or specify the value of N.

The text identifies the idea's origin and notes that code was prepared for MetaTrader, but it provides no backtest, market, timeframe, transaction-cost assumptions, or measured results. It therefore describes a testable signal concept rather than evidence of a profitable strategy. Readers would need to define bar types and body measurements consistently and evaluate the rules across instruments and market conditions before drawing conclusions.

Key ideas

• The signal examines sequences of consecutive bars and compares each real body with the previous one.
• A run of bullish bars with growing bodies triggers a sell signal.
• A run of bearish bars with growing bodies triggers a buy signal.
• The document does not specify the required run length 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.