RSI-Confirmed Reversal Runs with Fixed-Risk Targets

Summary

This scalping strategy looks for a reversal candle followed by a run of consecutive candles moving in the opposite direction. For a bullish setup, each run candle must close up and hold above the reversal candle's low; the bearish setup applies the inverse conditions. A configurable tolerance allows limited movement against the run. RSI can filter entries by requiring it to be rising above a floor for longs or falling below a ceiling for shorts.

The strategy places the stop at the reversal candle's extreme and sets a fixed profit target using a selectable reward-to-risk multiple. Longs are enabled by default, while shorts are disabled by default. The document provides implementation details but no backtest results, market or timeframe recommendation, or evidence that the pattern has an edge. Performance would depend on settings, execution costs, and whether the historical test models fills and risk appropriately.

Key ideas

• A reversal candle must be followed by a configurable run of candles moving in the opposite direction.
• Run candles must hold beyond the reversal candle's extreme, subject to a wobble tolerance.
• An optional RSI filter checks both the indicator's level and its direction.
• Stops sit at the reversal candle's extreme, with profit targets set as a fixed risk multiple.
• The document provides no performance evidence or validated market and timeframe guidance.

Tags

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