Wick-Dominance Signals with Fixed Dollar Risk and Reward
Summary
The available portion describes a candlestick strategy that evaluates the previous bar’s upper and lower wicks against its ATR and against each other. It also filters out small-body candles using a minimum body size relative to ATR. A dominant upper wick is associated with a long signal, while a dominant lower wick is associated with a short signal; the visible conditions require no open position and a confirmed bar. The script calculates stop-loss and take-profit distances from user-set dollar amounts, position quantity, and the instrument’s tick value.
The title calls the setup a negative risk-reward strategy, and the visible defaults specify a $1,000 stop amount and $300 profit amount. The excerpt ends partway through signal logic, so the complete entry and exit implementation cannot be assessed. It provides no backtest results or evidence that the candle pattern is profitable. The code also displays a break-even win-rate calculation, but realized performance would depend on costs, execution, and the full strategy rules.
Key ideas
- The signal examines the prior candle’s total wick size relative to ATR.
- A wick must dominate the opposite wick by a configurable ratio.
- A minimum candle body relative to ATR filters small-body candles.
- The visible signal conditions require a confirmed bar and no current position.
- Dollar-based risk and reward amounts are converted into price distances using quantity and tick value.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.