This is a simple algorithm that I used on timeframe > m30 to detect strong reversal signals based on :
- ZL 12, 26, 9
- Price vs 7
Last two parameters are optional but gives more security. Otherwise, waiting for confirmation gives later entry.
Up to you to find the right balance between too much security (and taking the trade too late) and not enough confirmation (taking the trade too early and it will go the opposite way)
I recommend the novice traders (less than 2 years trading), to stick with the 3 parameters above.
It's to be used after a strong moment and as we're talking about reversals, I mean trade against the current trend.
Meaning they're more risky, so... you know the drill :) :
- Tight SL
- Protect the position quickly when going in the way you want
- Don't aim for very high TP. Have a few laddered obviously in any case
- Use a trailing stop to protect your gains
Hope you'll like it
- My recommendation is to let the source = close everywhere. You don't have to wait for the candle close to get a confirmation. With the alert, you can select the options "Once per Bar" or "Only Once" and it will trigger as soon as there is a convergence between all indicators selected
In other words, let's assume you selected "Engulfing" and "SMA" and want to track a bearish reversal on the H4 timeframe (after a strong move upwards, you want to short).
If you select in the alert "Once per Bar" or "Only Once", it won't wait for the candle to close below the SMA H4, but will trigger as soon as it's going below it (even for a second)
This technique allows to take those trades a bit earlier but still with security
- Better engulfing pattern recognizition : got inspired from @LucF script tradingview.com/script/McCWAZFb-Bearish-Candles for the formula
- note for myself : text extensively before publishing next time.
Honestly, I backtested it the whole morning and... it's really a fantastic tool now to play reversals
(will delete this publication if another bug is found or if too many of my followers lose money with this algorithm.... bug is more likely to happen because my followers are great)
Plese shoot in the comments if you have any question
I detected that a few engulfing were discarded. Seems to be fixed now :)
Discord channel: https://discord.gg/K6NCTX4