Wick-Dominance Signals with Fixed Dollar Risk and Reward

Summary

The visible portion of this strategy defines a reversal signal from the prior candle’s wick proportions, its total wick size relative to ATR, and a minimum candle-body size. A dominant upper wick is associated with a long signal, while a dominant lower wick is associated with a short signal, subject to the strategy being flat and the current bar being confirmed. The settings shown use ATR length 14, a wick ratio threshold of 2, and a minimum body threshold expressed as a fraction of ATR.

Risk and reward are set as dollar amounts, with the displayed defaults allocating more to the stop loss than to the profit target. The script derives price distances from position quantity and instrument tick value, and it calculates a break-even win-rate measure from the reward-to-risk ratio. The supplied document cuts off during the short-signal condition, before the order placement, exits, and any results appear. Thus the full trade logic and actual performance cannot be assessed from this excerpt; its configurable values and calculations alone do not establish profitability.

Key ideas

• The signal logic examines the previous candle’s wick balance and total wick size relative to ATR.
• A minimum candle body threshold is used to filter very small-bodied candles.
• The displayed defaults set a larger dollar stop loss than take-profit amount.
• The script converts dollar risk and reward amounts into price distances using quantity and tick value.
• The excerpt ends before order execution, exit behavior, and any backtest results are shown.

Tags

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