Turtle Soup Reversals with Donchian, Order Block, and Fair Value Gap Filters

Summary

This strategy looks for failed breaks of recent Donchian highs or lows and enters in the opposite direction when price returns within the prior range. It distinguishes body breaks from wick-only breaks, treating body-based setups as stronger. Optional order block and fair value gap conditions add confirmation, while the stop is placed at the signal candle’s extreme and the profit target uses a preset risk-reward multiple.

The document describes the rules and parameter risks but provides no performance results. It says the approach is best suited to ranging markets and may struggle when a strong trend turns an apparent failure into a genuine breakout. Results may also depend on timeframe, the Donchian lookback, and stop placement. The proposed improvements include trend, volume, time, and volatility filters, as well as adaptive parameters; these remain suggestions rather than tested enhancements.

Key ideas

• The setup enters against a Donchian breakout when the candle closes back inside the prior range.
• Body-based and wick-only failures form separate long and short signal types.
• Order block and fair value gap checks can be enabled as additional entry filters.
• Stops use the signal candle extreme, and targets are set by a risk-reward ratio.
• The strategy may be vulnerable to strong trends, parameter sensitivity, and timeframe noise.

Tags

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