Three Line Strike Reversal Strategy with Configurable Risk Controls

Summary

This strategy identifies a reversal pattern in which three consecutive candles move in one direction and are followed by a larger candle engulfing the prior candle in the opposite direction. It defines bullish and bearish setups symmetrically, comparing candle body sizes and colors. Optional filters and chart features include a trading-session window, moving-average display, and volume thresholds based on a moving average of volume.

The strategy can take long and short signals, with configurable stop approaches using fixed pip distance or ATR-based trailing logic, plus a selectable risk/reward ratio. It also includes position-sizing calculations and alert formats for external trading connectors. The document provides implementation details but no performance results, market-by-market evaluation, or evidence that the pattern predicts profitable reversals. Connector alerts require careful configuration, and the code's risk and sizing behavior may depend on instrument conventions and broker settings.

Key ideas

• A bearish setup follows three bullish candles with a larger bearish candle, while the bullish setup mirrors that sequence.
• The engulfing test compares candle body sizes and requires a color reversal.
• Optional controls include session filtering, volume thresholds, and a moving-average display.
• Stops can use fixed pip sizing or ATR-based trailing methods, with an adjustable risk/reward ratio.
• The source includes position sizing and alert routing, but it reports no strategy performance evidence.

Tags

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