This strategy is using Swing Failure Patterns as a reversion indicator.
The strategy automatically adapts itself to the timeframe of the current chart.
Swing Failure Pattern occurs when the price trend fails to set new highs in uptrend or meet new lows in a downtrend. This pattern helps traders decide when to enter and exit the market. Usually, traders enter in the downtrend i.e. lower price highs and lower price lows, and exit in the uptrend situation i.e. higher price highs and higher price lows. Thus, traders go against the current trend. This helps the traders take advantage of early trend reversal indicators.
Types of Failure Swing :
Failure Swing Top: This occurs when the stock price goes higher whereas the RSI fails to make a higher high and falls below the recent fail point. The Fail Point is where the RSI line is below the recent swing low. This Failure Swing indicates a short position.
Failure Swing Bottom: This occurs when the stock price gets lower whereas RSI fails to make a lower low and rises over the recent fail point. Fail point is the point where the RSI line is above the recent swing high. This Failure Swing indicates a long position.
Checked the twitter, what do you mean risk is not capped?
Technicien
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@jesse_not-james, take profits and stop loss are event triggered. They get triggered when price reach a ribbon of EMA. If the price suddenly crashes to 0 or pump to 1000000000000 , there is no stop loss. These are extreme examples but my point is your trade can go 20% against you before getting closed.
90%+ of the time it is about 3-4% (depending on the timeframe you're using)
Coierge
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@Technicien, the extremes are truly extreme. Can that be fixed in script or by applying it to less volatile markets?
Technicien
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@jesse_not-james, actually I believe most of the strategies on TradingView are at risk with the kind of maket conditions I just described. The probability that something crashes to 0 or pump to infinity while you're in a position is quite low. Trading liquid pairs prevent that risk a bit more.
We could add an hard stop loss in the script but I find the solution implemented quite elegant.
Coierge
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@Technicien, hard stops can be brutal but at the risk of blowing an account look much better
ElPonzito
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Nice sscripy, if i wanna try it with wunder, this line {{strategy.order.comment}} still trigger the order?
Technicien
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@YukalMoon, i guess so. haven't tried tbh
ceh628
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this does not work at all ! dont show anything on chart
Technicien
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@ceh628, depending of the timeframe and the ticker you are using, it is possible that the strategy doesnt trigger any trade.