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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.