Scoring Swing High-Low Patterns with Confirmation Filters

Summary

This strategy identifies higher lows and lower highs, then assigns each confirmed pattern a score using volume, RSI, candle-body size, and moving-average alignment. Trades are restricted to signals scoring at least four points. Stops are set at the lowest low or highest high over the preceding ten bars, and a new qualifying signal can close and reverse an existing position. The source also marks failed patterns and consecutive same-direction signals.

The document gives example thresholds and a published one-hour ETH/USDT futures test interval, but provides no actual backtest statistics to support its performance claims. Its suggested use is in markets that trend with pullbacks and have moderate volatility and stable volume. Risks include losses during regime changes, relatively wide stops, and variable results across assets and conditions. The proposed per-trade risk limit and pause after consecutive losses are guidance, not evidence that the system will control drawdowns.

Key ideas

• Higher lows and lower highs form the base signals, with directional candle confirmation.
• Volume, RSI, candle strength, and trend alignment contribute to a five-point quality score.
• Only signals meeting the stated minimum score trigger entries.
• Stops use recent price extremes, and qualifying opposite signals can reverse positions.
• The document supplies a test configuration but no performance results validating its claims.

Tags

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