Two-Candle Momentum Rule for Short-Term Price Forecasts

Summary

This strategy estimates the next 15-minute candle’s close using the direction and body size of the previous two 30-minute candles. If both candles close above their opens, it projects the last candle’s gain upward from its close; if both close below their opens, it projects an equivalent decline. When their directions differ, the forecast is the last 30-minute close. The strategy enters long or short according to whether that projected price is above or below the current close.

The method is simple and uses little historical data, but the document provides no measured forecast accuracy or trading results. It relies only on candle opens and closes, can lag shorter-term price moves, and may fail around gaps or unexpected events. The authors suggest adding indicators, candle details, and stop rules, and validating the logic on live data. Published settings refer to BTC_USDT futures over a stated date range, but no performance statistics are reported.

Key ideas

• The rule compares the open and close direction of the two latest 30-minute candles.
• Two candles moving in the same direction lead to a projection based on the latest candle’s body size.
• Mixed candle directions produce a neutral forecast at the latest 30-minute close.
• The strategy takes long or short positions based on the forecast’s relation to the current close.
• No accuracy or profitability evidence is provided, and gaps or rapid changes can undermine the rule.

Tags

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