[NM] Reversal Candles v01

Reversal candles are a very easy way to identify a turn in trend, this indicator has some specific additional conditions for the reversal candle.

BUY Signal reversal candle

• Low of current candle exceeds low of previous candle
  
• Low of current candle is lowest for last 7 candles
  
• High of current candle exceeds high of previous candle
  
• Close of current candle is in the upper 50% of the range of this candle
  

SELL Signal reversal candle

• High of current candle exceeds high of previous candle
  
• High of current candle is Highest for last 7 candles
  
• Low of current candle exceeds low of previous candle
  
• Close of current candle is in the lower 50% of the range of this candle
  

How do I trade it ? (example buy signal)

• Wait for close of the candle and the BUY signal
  
• Put a buy stop entry 5 pips above the high of the candle
  
• Put a stop loss 5 pips below the low of the candle
  
• Calculate difference between entry and stop loss and set your target that number of pips above the entry for a 1:1 RR trade*
  
• Wait for your your target or stop loss to be triggered
  * Alternatively, you can take 50% of the profit at the 1st (1:1 RR) profit target, move your stop to break even and let the rest of the position run for a higher potential profit.
  

Further advice on use
Personally I always look for some additional confirmation like a support or resistance level, a bounce of the EMA or a fibonacci level, but please feel free to add additional filters to make the strategy even more effective. I would strongly advise to backtest your strategy first so you can fine tune it and have confidence in trading it. Forward testing on a demo account before going live, although it takes longer, can be a worthy alternative. Works better on higher time frames.

How do you use it ?
Please leave a note in the comment section below to let me know if you use the indicator and how. There's definitely not just one way to use the indicator so I'm curious about your feedback.

To apply the script to your chart, just add it to your favourites so you can easily find it in the Indicators list.

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