► Overview:

The Reverse Candle Strategy is a systematic trading method that uses a customizable moving average to identify the direction of a prevailing market trend. By tracking the highest or lowest price during the trend, it waits for corrections (short-term reversals) before executing trades based on a specifically defined "reverse candle"—a candlestick pattern indicating the continuation of the original trend. This approach helps traders enter trades precisely when the market is most likely to resume moving in the initial trend direction.

► Description:

The core of the Reverse Candle Strategy revolves around accurately identifying and following the market trend and its corrections. Traders first select a type of moving average (Simple Moving Average, Exponential Moving Average, etc.) to clearly signal market direction. When prices move above this moving average, an uptrend is confirmed; conversely, when prices fall below the moving average, a downtrend is established.

Once a trend is confirmed, the strategy keeps track of the highest price during an uptrend or the lowest price during a downtrend. The strategy then patiently waits for a correction—a temporary reversal opposite to the main trend. Traders can customize various settings to define precisely what constitutes a valid correction, such as:

• The minimum and maximum size (distance in pips) of the trend and the correction.

• The percentage range of the correction compared to the size of the main trend (e.g., a correction between 10% to 30% of the trend).

• The duration of the correction measured in number of candles.

Once these correction conditions are met, the strategy awaits the appearance of a "reverse candle." This specific candlestick acts as the trigger for trade entries. Users have full control over defining the characteristics of this reverse candle, including:

• The minimum and maximum size of the candle's body (the distance between open and close prices).

• The ratio of the candle's body size relative to its total length (body-to-candle ratio), ensuring that only significant, meaningful candles trigger trade entries.

↑ Long Trade Example: When the market price is trending above the moving average and has reached its highest point, a correction downward occurs. The strategy waits until the defined reverse candle pattern emerges, indicating that the correction is complete. At this moment, a long position is opened, anticipating that prices will continue rising and resume the primary uptrend.

↓ Short Trade Example: Conversely, in a downtrend, once the lowest price is reached and a correction upward occurs, the strategy waits until a clearly defined reverse candle forms. A short position is executed at this point, anticipating prices will resume their downward trend.

✕ Exit Conditions & Risk Management: To protect capital and maximize profits, the Reverse Candle Strategy provides several robust methods for exiting trades:

• Stop Loss Options:

  • Fixed pip amount.

  • ATR-based stop loss.

  • Using the highest or lowest price from a specific number of past candles.

  • Closing trades if the market moves against the trade direction after a predefined number of candles.

• Take Profit Levels:

  • Up to three separate take-profit targets using fixed pip amounts, ATR values, or based on risk-to-reward ratios calculated from the stop-loss.

  • Optionally close trades after a set number of candles move favorably.

• Trailing Stop: Automatically moves the stop-loss level closer to the market price as the trade becomes profitable, protecting gains while allowing the trade to continue capturing profits.

• Break Even: Moves the stop-loss level to the entry price once a predetermined profit level is achieved, eliminating further risk.

• Moving Average Crosses: Trades can be automatically closed when the price crosses back over the moving average.

► Features & Settings:

⚙︎ Moving Average: Select your preferred type of moving average (SMA, EMA, etc.) to accurately determine trend direction.

⚙︎ Trend & Corrections: Precisely define the characteristics and parameters for identifying trends and corrections, including minimum/maximum distances, percentages, and candle duration.

⚙︎ Entry Candle: Set detailed criteria for the reverse candle pattern to ensure trade entries are clear, reliable, and effective.

⚙︎ Trading Sessions: Choose specific trading hours to ensure trades only occur during preferred, high-volume market times.

⚙︎ Trading Days: Define specific days of the week for active trading, allowing avoidance of undesirable market conditions.

⚙︎ Backtesting: Easily test the strategy performance historically within a selected date range, with an option to deactivate this feature when not required.

⚙︎ Trades: Control trade direction (long, short, or both), manage position sizing (fixed or percentage-based), limit the number of open trades, and set daily trade restrictions.

⚙︎ Trades Exits: Customize how and when trades are exited to ensure effective risk management and optimal profit-taking.

⚙︎ Alerts: Receive detailed notifications about all trading actions, such as entry and exit points, including dynamic placeholders for stop-loss and take-profit levels.

⚙︎ Dashboard: Benefit from an intuitive, visual representation of ongoing and past trades directly on the trading chart, helping users monitor strategy performance in real-time and make informed decisions.