Testing TheStrat Reversal and Continuation Patterns with Stop Entries

Summary

This document describes a configurable backtest strategy for several TheStrat price-action patterns. It classifies bars as inside, outside, two-up, or two-down, then tests selected continuation and reversal combinations, including 2-1-2, 3-1-2, 3-2-2, 1-2-2, and 2-2 setups. Entries use stop orders beyond the current bar's high or low; the script sets stop-loss and profit-target distances from recent bar ranges. Variables control which setups are enabled, tolerance, and stop and target buffers, while options can restrict long or short trades.

The code is a testing framework, not evidence that any setup is profitable: the document supplies no markets, sample period, performance results, or trading-cost assumptions. Outcomes depend on the chosen combinations and parameters, and the source recommends loading test variables from an accompanying file. Traders should validate order behavior, risk sizing, and costs in their own platform and data before drawing conclusions.

Key ideas

• The tester evaluates multiple TheStrat reversal and continuation bar patterns.
• Pattern definitions use relative highs, lows, and candle direction with a configurable tolerance.
• Entries are stop orders placed beyond the current bar's high or low.
• Stop-loss and target distances are based on recent price ranges and adjustable buffers.
• The document provides code but no backtest results or evidence of profitability.

Tags

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