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Strategies / Pattern / Long Shadow Candle Breakout

Long Shadow Candle Breakout

Watches for a small-range candle whose shadows total at least 2 times its body. Buys when the next candle closes above the pattern high, and sells short when it closes below the pattern low, with stops just past the far end of the pattern.

PatternLong & shortSwingDAX 40Daily
n/aProfit factor
262Net profit EUR
68.18%Win rate
44Trades
-192Max drawdown
5.96Avg trade

Best run of 2. DAX 40, Daily, spread 3, from run sweeps:2026-10-12-DAX40-D-opt.tsv:15.

Entry rules, long

  1. The previous bar has shadows at least 2 times its body and a range of 0.04% to 0.086% of the close.

Entry rules, short

  1. The previous bar has shadows at least 2 times its body and a range of 0.04% to 0.086% of the close.

Exit rules

  2. A long target sits at the pattern bar's high plus 5 times its high-to-low range, and a short target sits at its low minus 5 times that range.

Test conditions

PeriodUp to 2026-10-12
InstrumentDAX 40, 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 tested2026-10-12

Every run

Markets and timeframes tested

MarketTimeframePFTradesWin %NetMax DD
DAX 40Best runDailyn/a 4468.18262 EUR-192
Nikkei 225Dailyn/a 1275.0066.10 USD-59.30

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Long Shadow Candle Breakout
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Pattern
// Direction: Long & short
// Timeframe tested: Daily
// ==============================================================

DEFPARAM CumulateOrders = false

body = abs(open - close)
hl = high - low
shadows = (high - max(open, close)) + (min(open, close) - low)

27 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.
Read this firstKnown weaknesses3 points
  • No profit factor is available, because only sweep results exist for this strategy.
  • The best run has only 44 trades, which is a small sample to judge it on.
  • The maximum drawdown of 192 EUR is large next to the net profit of 262 EUR.

Questions

About this strategy

Can I run Long Shadow Candle Breakout 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 2 market and timeframe combinations. The best run by trade count was DAX 40, Daily, with 44 trades.

How large was the drawdown?

The best run had a maximum drawdown of 192 EUR at the tested position size, against a net result of 262 EUR.

Does it trade long, short or both?

It trades both long and short.

Related

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Breakout Reversal

Also a pattern strategy.

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

The ProRealAlgos community gets the full rules, the complete code and the automated portfolio.

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