Screening Stocks by Daily Range, Reversal Candles, and Capital Flow

Summary

This post proposes a stock screen combining daily range above one percent, a reversal or engulfing-style candle condition, and strong capital flow. Its rationale is that price movement and a reversal pattern can be supplemented with an order-flow measure to rank or filter candidate stocks. The post includes example indicator logic and Python-style code using price, capital-flow, and candle-pattern data, then suggests combining these signals with fundamentals or other flow measures.

The examples are not a demonstrated trading system: no backtest, out-of-sample results, transaction costs, or risk controls are reported. The code also leaves implementation details unclear, including the capital-flow ranking and candle-pattern interpretation, and its named pattern may not align with the prose description of reversal. The author cautions that technical-only selection can omit important market and fundamental factors, and recommends broader screening or modeling without showing that these changes improve results.

Key ideas

• The proposed screen requires a daily high-to-low range above one percent, a reversal-style candle condition, and strong capital flow.
• Capital flow is used to add a measure of buying and selling activity to price-based screening.
• The post includes sample formula and Python logic, but does not report backtest or live performance.
• The implementation leaves some signal definitions unclear, including how capital-flow strength is ranked.
• The author notes that technical indicators can omit fundamental and broader market information.

Tags

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