SuperTrend Trapping Candle Entries Using Volume and Candle Size
Summary
This strategy combines SuperTrend direction with small, opposing candles that are intended to signal that traders in the countertrend move may be trapped. In an uptrend, it looks for a bearish candle; in a downtrend, it looks for a bullish candle. The candle must also meet a small-range threshold and a volume condition. The script defines that condition as either volume exceeding the previous bar or a sequence of three candles moving in one direction while volume declines. It enters long or short when the corresponding pattern appears.
The accompanying rules suggest entering only after price crosses the signal candle’s high or low, with a stop near that candle or a nearby swing point. The author advises using a separate approach to filter sideways markets. This is a rule description and open-source implementation, not evidence of profitability: no test results or market-specific performance are provided. The volume condition and fixed candle-size threshold may also behave differently across instruments and timeframes.
Key ideas
- SuperTrend supplies the trend direction for the strategy’s long and short signals.
- A small candle against the trend qualifies when the script’s volume condition is also met.
- The suggested entry waits for price to break the signal candle’s extreme.
- Stops are proposed near the signal candle or a nearby swing point.
- The document provides no performance evidence and recommends separate sideways-market filtering.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.