Short-Term Candlestick Reversal Entries with RVI Exits

Summary

This short-term reversal strategy looks for two consecutive candles of the same color, each exceeding a minimum body size. After two bearish candles it enters long; after two bullish candles it enters short. The Relative Vigor Index (RVI) and its smoothed signal line govern exits through crossovers. The provided code implements these two-candle entry conditions and RVI exits, with configurable body-size and RVI inputs.

The text characterizes the approach as mean reversion and discusses fixed trade size, stop loss, and profit taking, but the supplied code has no stop loss or profit target and uses no explicit position-sizing adjustment. Published settings specify a three-day BTC/USDT futures backtest over one year, yet no performance results are included. The source comments also describe a different, simpler entry rule than the strategy code. The document warns that entries can fail during persistent trends and that fixed sizing can create excessive account risk; it suggests testing more flexible candle-count rules and risk controls.

Key ideas

• The code enters long after two sufficiently large bearish candles and short after two sufficiently large bullish candles.
• RVI and its signal line determine when an open position is closed.
• The code does not implement stop loss or profit target despite the prose mentioning them.
• The document's explanation and source comments do not fully match the implemented entry logic.
• The published backtest settings include no performance results.

Tags

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