SWING BREAK – DAX reversal patterns trading strategy

SWING BREAK – DAX reversal patterns trading strategy

When the price breaks a resistance or a support level, there is a breakout.
But most of the time when the price meets a level of support or resistance it is rejected back. If not, it would not make sense to talk about supports and resistances.

This strategy searches for levels of support and resistance. The levels are dynamic in the sense that they are periodically updated every 2 hours.
We are looking for inversion patterns on these levels where, we hope, the price rebounds.
The patterns used here are the “pin bar” and the “engulfing”.

  • The “pin bar buy” is a green candle with a small body and a long lower sword.
  • The “pin bar sell” is a red candle with a small body and a long upper sword.
  • The “bullish engulfing” consists of 2 candles, the first red and the second green that totally incorporates the first one.
  • The “bearish engulfing” is composed of 2 candles, the first green and the second red that totally incorporates the first one.

(Note that the “engulfing” is a masked “pin bar” – example: an “engulfing” on timeframe at 1 min becomes a “pin bar” on timeframe at 2 min.).

Of course you can also use other inversion patterns, for example, morning stars, evening stars, hammers, doji, harami, narrow ranges, etc. At you find the best ones. Or, why not, an indicator of overbought and oversold (RSI, Stochastic, etc).

At the contrary, in the event that there was a “breakout”: that is if the price broke through the support or resistance, we buy or sell on a retracement in the direction of the trend.

The strategy is implemented with the possibility of increasing the number of contracts to buy / sell (see warnings in the code).
In addition, a daily monetary stoploss and a daily monetary profit target are set. If exceeded, no other operations are performed that day.
The orders are all “stop orders” and remain valid for the 3 bars after the entry signal has occurred.

The strategy has been tested on

Market: DAX – Timeframe 1 Min. – Capital € 10,000 – spread 1 point.

Many thanks to all those who want to test and / or implement what shared.



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Risk disclosure:

No information on this site is investment advice or a solicitation to buy or sell any financial instrument. Past performance is not indicative of future results. Trading may expose you to risk of loss greater than your deposits and is only suitable for experienced investors who have sufficient financial means to bear such risk.

ProRealTime ITF files and other attachments : How to import ITF files into ProRealTime platform?

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  1. vlongobardo67 • 03/15/2018 #

    Ciao Fulvio,

    ho scaricato ed importato il file.
    m,a se lo faccio girare sul miniDax non apre nessun ordine !
    cosa sto sbagliando ?

  2. FULVIO09 • 03/15/2018 #

    Attualmente non c’è sufficiente volatilità : la condizione “C0 = AverageTrueRange[1500](Close) > 3” non è verificata.

  3. vlongobardo67 • 03/15/2018 #

    Ma io intendevo in backtest !
    Scusa non l’ho menzionato.

  4. ciniselloftse • 03/15/2018 #

    salve fulvio .il trading sistem e sempre profittevole?

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