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Strategies / Pattern / Green Candle Reversal Long

Green Candle Reversal Long

The idea buys after a red candle is followed by a green candle that closes above the prior open, when the close is below the 20 period average. It sells the long when the close moves above the upper Bollinger Band.

PatternLong onlySwingNikkei 2251 hour
1.25Profit factor
30,031Net profit USD
67.16%Win rate
1,087Trades
-6,736Max drawdown
27.63Avg trade

Best run of 20. Nikkei 225, 1 hour, spread 10, from run pf:2026-10-04-NIKKEI-1h.tsv:4.

Entry rules, long

  2. The close is below the 20 period average (the Bollinger basis).
  3. The candles 2 and 3 bars back were not both red.
  4. No long position is open.

Exit rules

  1. The close is above the upper Bollinger Band (20 periods, 2 standard deviations), closing the long.

Test conditions

PeriodUp to 2026-10-04
InstrumentNikkei 225, 1 hour
Spread10 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 tested2026-10-04

Every run

Markets and timeframes tested

MarketTimeframePFTradesWin %NetMax DD
Nikkei 225Best run1 hour1.25 1,08767.1630,031 USD-6,736
USD/JPY4 hoursn/a 42769.79320,870 USD-219,550
Dow JonesDailyn/a 15080.0031,758 EUR-8,615
Nikkei 2254 hoursn/a 27868.7122,856 USD-13,127
SilverDailyn/a 15966.6719,277 USD-11,315
Dow Jones4 hoursn/a 11678.4514,662 EUR-11,234
Nasdaq 1004 hoursn/a 35773.3912,308 EUR-5,308
DAX 40Dailyn/a 10571.4311,148 EUR-5,547
Dow Jones30 minn/a 96173.0510,393 EUR-6,702
Dow Jones1 hourn/a 49671.7710,008 EUR-7,810
Nasdaq 1001 hourn/a 1,46770.488,319 EUR-5,173
Dow Jones5 minn/a 2,25869.756,540 EUR-6,203
DAX 404 hoursn/a 34868.976,452 EUR-5,124
FTSE 100Dailyn/a 12173.554,474 EUR-2,906
FTSE 1004 hoursn/a 33971.983,853 EUR-2,777
S&P 500Dailyn/a 13476.873,116 EUR-1,190
S&P 50030 minn/a 2,08371.342,052 EUR-1,112
S&P 5001 hourn/a 1,43470.781,976 EUR-1,070
S&P 5004 hoursn/a 34469.481,623 EUR-1,275
GoldDailyn/a 16668.07886 EUR-772

Charts

Results by run

Top 10 of 20 runs. The full list is in the table above.

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Green Candle Reversal Long
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Pattern
// Direction: Long only
// Timeframe tested: 1 hour
// ==============================================================

DEFPARAM CumulateOrders = false

basis = Average[20](close)
upper = basis + 2 * STD[20](close)

11 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

Bollinger BandsSMAStandard Deviation
Read this firstKnown weaknesses2 points
  • The code sets no stop loss, so a losing trade stays open until an exit signal arrives.
  • Results include the spread only. Commissions and overnight financing are not included.

Questions

About this strategy

Can I run Green Candle Reversal Long 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 20 market and timeframe combinations. The best run was Nikkei 225, 1 hour, with a profit factor of 1.25 over 1,087 trades.

How large was the drawdown?

The best run had a maximum drawdown of 6,736 USD at the tested position size, against a net result of 30,031 USD.

Does it trade long, short or both?

It only takes long trades.

Related

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Uses the same indicator.

1.04 PF · 10,813 trades

Rock Climber

Best run on the same market, Nikkei 225.

1.44 PF · 1,644 trades

Reversal Pattern With Center of Gravity

Also a pattern strategy.

1.24 PF · 1,951 trades

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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