Strict Failed-Two Reversal Signals with Daily Bias Confirmation

Summary

This script defines strict failed-two reversal patterns on a chart timeframe and includes a daily higher-timeframe bias filter. It tracks consecutive bullish or bearish candles, then looks for a reversal candle that briefly breaches the prior candle’s range but closes back inside it. The bullish setup follows a bearish streak and breaks below the prior low before closing within the prior range; the bearish setup mirrors this after a bullish streak. Inside bars are excluded, and the minimum streak length is configurable.

The visible settings allow bar-close confirmation, enabling or disabling failed-two signals and daily bias, requiring the daily bias to agree with the trade, adding a stop buffer, and skipping entries when a target has already been passed. Orders are configured to process on candle close. The excerpt ends during the higher-timeframe pattern functions, so it does not show all bias calculations, order management, or the full implementation. No market, backtest results, or validation evidence is provided; the rules should be read as a pattern-based strategy specification, not a demonstrated source of returns.

Key ideas

• The setup looks for a reversal candle after a configurable run of consecutive candles in the opposite direction.
• A valid failed-two pattern pierces the prior candle’s range and closes back inside it.
• Inside bars are excluded, and bar-close confirmation can be enabled.
• The script includes controls for aligning trades with a daily failed-two bias.
• The excerpt is incomplete and supplies no backtest results or performance evidence.

Tags

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