Support and Resistance Breakouts with Candlestick and Structure Filters

Summary

This rule set combines recent support and resistance levels, selected candlestick patterns, and a simple market structure classification. It defines levels using the lowest low and highest high over a lookback period, and identifies bullish or bearish structure by comparing a prior high and low with the preceding values. Bullish engulfing candles and hammers contribute to buy conditions; bearish engulfing candles and shooting stars contribute to sell conditions. The written description says the system applies different combinations in trending, ranging, and transitional markets, with fixed stop distance and a stated 1:3 risk-reward target.

The material includes source code, parameters, and a short one-hour backtest configuration on a crypto pair, but reports no performance metrics, so this is not evidence of an edge. There are notable implementation limits: the code's trend test compares only a pair of historical bars, and its ranging branch can trade from the same candle conditions without a distinct range rule. It passes calculated stop and target values as entry order parameters rather than clearly attaching them as protective exits. Slippage, parameter sensitivity, and actual fills need investigation.

Key ideas

• Support and resistance are computed from rolling low and high values over a configurable period.
• Candlestick conditions include engulfing patterns, hammers, and shooting stars.
• Market direction is classified by comparing a historical high and low with the previous bar's values.
• The source code's ranging logic reuses the same buy and sell conditions as the directional branches.
• The published configuration specifies a short crypto backtest window but gives no performance results.

Tags

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