Three-Green-Candle Reversal Pattern with Risk-Defined Long Exits

Summary

This long-only candlestick method looks for three rising green candles after a red candle. The green candles must close progressively higher; the red candle's low also serves as a reference point in the pattern. When the conditions align, the strategy enters long, places a stop at the red candle's low, and sets a profit target at a distance from entry equal to the entry-to-stop distance, yielding a nominal one-to-one reward-to-risk relationship before costs.

The document reports favorable backtest results but provides no figures, and the published settings cover only one month of BTC/USDT futures data. The pattern may fail to predict future direction, ignores broader market conditions, and does not account for trading fees or slippage. The code enters only when flat and applies the same stop and target logic; the write-up's suggested market filters, volume confirmation, and position-sizing changes are possible extensions, not tested evidence.

Key ideas

• The setup requires a red candle followed by three green candles with progressively higher closes.
• The entry is long, with the stop placed at the red candle's low.
• The profit target is set one stop-distance above the entry price.
• The pattern does not account for broader market direction, fees, or slippage.
• The document gives no numerical performance data, and its published test spans one month of BTC/USDT futures.

Tags

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