Three Rising Candles with a Percentage Stop-Loss Exit

Summary

This simple long-only strategy looks for three consecutive increases in closing prices, using the prior candles to form an entry condition. When that pattern appears, it opens a long position on the next candle and sets a stop below the entry price by a selected percentage. It closes the position if three consecutive declines appear or the stop is reached. The document lists a stop-loss input and a BTC/USDT futures backtest configuration, but gives no measured performance results.

The method is presented as a way to participate in directional moves with a clear exit rule. Its main stated weakness is repeated entries and exits during non-trending or choppy markets, which can raise trading costs. A fixed percentage stop may be too tight or too wide for the instrument’s volatility and liquidity. Although the title refers to a dynamic grid and adaptive moving average, the described rules and provided source do not implement a grid or moving average, and the stop is set from entry price rather than visibly trailed as price changes.

Key ideas

• The entry condition looks for three consecutive higher closes and opens long on the following candle.
• Three consecutive lower closes or a touch of the percentage stop triggers an exit.
• A fixed stop percentage may behave differently across instruments and volatility conditions.
• Choppy markets can cause repeated trading and higher costs.
• The title mentions grid and moving-average elements that are absent from the described and coded rules.

Tags

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