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I open this thread to share a system that I have been using for a few months in the daily chart, mainly in older pairs. I have baptized it 3 Candles and Reverso, as it is based on a simple sequence of price action. Rules: Identify a previous trend (minimum 3 candles of the same color and body).
That's not a system, it's an obvious thing wrapped in word.
Yes, I opened it because it works. No need to reinvent the wheel to operate consistently. The key is in discipline, not complexity.
Interesting. lt reminds me of a hammer candle setup, but more structured. Have you retested this in more than a couple?
Yes. It works especially well in GBP/USD, EUR/USD and USD/JPY. In crossed pairs like EUR/JPY there is more noise, but it is still profitable if the signals with structure are filtered.
And what do you do if there's a reversion candle but the next day there's no confirmation?
If there's no confirmation on two subsequent candles, I'll rule out the signal.
It seems simple, but everyone's problem is to run simple without putting the ego in the middle.
This system falls if someone starts to anticipate without waiting for confirmation.
I uploaded some examples with images. It helps a lot to visualize how the entry is given.
I'm preparing a series of captures with real operations. I'm going to upload them in the thread so you can see how I apply each rule.
Do you use any indicators of support or is it purely price action?
Price action only. Sometimes I frame support/resistance zones in weekly, but I don't use indicators.
If you don't have solid backtesting data, it's just steroid intuition.
I have 8 months of demo operation and 3 months in real with this system. It is not perfect, but it is profitable with a 45% success rate and average RR of 1:2.3.
Do you go into the opening of the candle or wait for some movement?
I enter the opening if there is clear confirmation. If the previous candle closes tightly, I do not expect setbacks.
Did you test it in cryptos? Because that pattern is seen a lot in daily BTC.
Good observation. I�m starting to test it on BTC/USD and ETH/USD. Preliminary results are promising.
This is pure visual analysis. What happens when there is macro news and patterns break?
I don't operate if there's high-impact news scheduled. I skip those days or hope the price stabilizes.
Finally a system without a thousand indicators and rules that no one understands. I follow you.
Thank you. My intention was precisely that: something simple that can be applied with constancy.
Are you going to operate every day, or only if all the conditions are met?
Only if the employer shows up. Sometimes I spend days without surgery. Patience pays.
What if you skip the stop just before the TP?
If I lose an operation, I expect a new signal.Reentering the same area is usually emotional.
Can you share results from the last few weeks? It would be interesting to see the actual performance.
Sure. In the next answers I will raise the weekly results with account captures (in demo and real
I like the concept, but it's hard for me to wait so long for the daily candle to close.
Yes, it requires patience, but in return you avoid the noise of the smaller frames and make cleaner decisions.
Have you tried adapting this to H4 or M30?
Yes, but effectiveness drops a lot. Daily there are fewer false signs.
Your SL moves to BE once the price goes up?
Yes. If the price reaches half the TP, I move the SL in. I reduce the risk.
Did you ever think to automate this in an EA?
I thought about it, but it would be difficult to program the subjective reading of the reversion candle. For now, I prefer to keep it manual.
What I like most about the system is that you don't depend on the market in real time. You can operate after the end of the day.
Exactly. That makes it ideal for those who have another job and cannot stand in front of the screen all day.
I'll test him in the next 30 days, then I'll count my results.