Trend-Filtered Price Action Entries with RSI and Candlestick Patterns

Summary

This strategy combines candlestick patterns, RSI conditions, and a long-term EMA alignment filter. Long entries require a bullish engulfing or morning-star pattern, a recent oversold RSI reading with RSI below its midpoint, and price above three rising, ordered EMAs. Short entries use bearish engulfing or evening-star patterns, a recent overbought reading with RSI above its midpoint, and price below three ordered falling EMAs. The script also defines inside-bar patterns, but they are commented out of the active entry logic.

Each entry is paired with fixed point-based take-profit and stop-loss settings. The supplied defaults include an RSI length of 14, overbought and oversold levels of 70 and 30, EMA lengths of 200, 600, and 1,000, and profit and loss distances of 400 and 300 points. The document provides source code and a brief description, but no market specification, backtest results, costs, or evidence that the settings generalize. The pattern definitions and fixed exits therefore need independent validation before practical use.

Key ideas

• Long and short entries require both a candlestick reversal pattern and a matching EMA trend alignment.
• RSI must have recently reached an extreme and remain on the corresponding side of its midpoint.
• The active patterns are engulfing candles and morning or evening stars; inside bars are defined but inactive.
• Exits use fixed point-based profit and loss distances.
• The source provides parameter defaults but no performance or robustness evidence.

Tags

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