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Strategies / Pattern / Failed Breakdown Candle EMA Filter

Failed Breakdown Candle EMA Filter

A candle pattern that buys after a bearish candle is undercut and then closes back up, provided the close is above a 200-period EMA. It sells short on the mirror pattern below the EMA, with 20-tick stops and 1.0 risk-reward targets.

PatternLong & shortSwingNasdaq 100Daily
n/aProfit factor
1,796Net profit EUR
47.09%Win rate
654Trades
-1,763Max drawdown
2.75Avg trade

Best run of 1. Nasdaq 100, Daily, spread 3, from run sweeps:2026-10-03-NAS100-D-opt.tsv:45.

Entry rules, long

  1. The previous candle is bearish, with close below open.
  3. The current candle closes bullish, above its open and above the previous low.
  4. The close is above the 200-period EMA, and the stop distance (20 ticks below the candle low) is positive.

Entry rules, short

  1. The previous candle is bullish, with close above open.
  3. The current candle closes bearish, below its open and below the previous high.
  4. The close is below the 200-period EMA, and the stop distance (20 ticks above the candle high) is positive.

Exit rules

  2. The profit target is set at 1.0 times the initial risk distance.
  3. No reversal exit is used; positions close only at the stop or target.

Test conditions

PeriodUp to 2026-10-03
InstrumentNasdaq 100, Daily
Spread3 points
Starting capital1,000,000
CostsSpread only. Commissions and overnight financing are not included.
BarsUp to 200,000 bars, fewer where the instrument has less history
Last tested2026-10-03

Every run

Markets and timeframes tested

MarketTimeframePFTradesWin %NetMax DD
Nasdaq 100Best runDailyn/a 65447.091,796 EUR-1,763

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Failed Breakdown Candle EMA Filter
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Pattern
// Direction: Long & short
// Timeframe tested: Daily
// ==============================================================

DEFPARAM CumulateOrders = false

ema = ExponentialAverage[200](close)
buf = 20 * TICKSIZE

19 more lines: the entry and exit rules.

Setup

How to load it

  1. Copy the code with the copy button on the code block.
  2. In ProRealTime, open a chart of the instrument and timeframe you want to test, then open ProOrder > New trading system and choose "Create with programming".
  3. Paste the code, give the system a name and save it.
  4. Click "Backtest", set your own spread and position size, and run it before you consider trading it live.

Indicators used

EMA
Read this firstKnown weaknesses3 points
  • No profit factor is available, because only sweep results exist for this strategy.
  • The maximum drawdown of 1,762 EUR is large next to the net profit of 1,796 EUR.
  • It was only tested on Nasdaq 100, so there is no evidence from other markets.

Questions

About this strategy

Can I run Failed Breakdown Candle EMA Filter in ProOrder?

Yes. The code is ProBuilder and runs as an automated ProOrder system. Backtest it on your own account with your own spread and position size before trading it live.

Which markets was it tested on?

It was tested on one combination, Nasdaq 100, Daily, with 654 trades.

How large was the drawdown?

The best run had a maximum drawdown of 1,762 EUR at the tested position size, against a net result of 1,796 EUR.

Does it trade long, short or both?

It trades both long and short.

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See how ProRealAlgos combines strategies like this into one automated portfolio.

Copy trading on US indices is available to ProRealAlgos members as spots open.

Past backtest results do not guarantee future results. This is not financial advice. Curated and maintained by ProRealAlgos. ProRealTime™ is a trademark of ProRealTime SAS. prorealalgos.comStatsDocs