Three-Candle Typical Price Strategy with Reversing Signals

Summary

This short strategy description uses the typical price, calculated from each bar’s high, low, and close, to generate directional signals. When typical prices rise across three consecutive completed bars, the system opens a buy if none is already open; when they fall across three bars, it opens a sell if there is no existing sell. An opposite signal closes the current position before opening the new one, so the method holds at most one position.

The document recommends evaluating the approach on hourly or longer timeframes and across several symbols. It supplies the signal rules but no backtest results, transaction-cost assumptions, stop-loss rules, or evidence that the pattern is profitable. The guidance to test multiple timeframes and instruments is therefore a suggestion, not validation of the strategy.

Key ideas

• The signal is based on the direction of typical prices across three completed bars.
• Three rising typical prices trigger a buy when no buy position is open.
• Three falling typical prices trigger a sell when no sell position is open.
• An opposing entry signal closes the current position before opening the new side.
• The author suggests testing hourly and longer bars across multiple instruments, but provides no performance evidence.

Tags

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