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Strategies / Trend / Reversal Pattern With ATR Trailing Line

Reversal Pattern With ATR Trailing Line

The system buys when a stochastic-based close reversal agrees with a close crossing above an ATR trailing line, and sells short on the mirror condition. Positions close when the states no longer agree.

TrendLong & shortIntradayDAX 4030 min
n/aProfit factor
8,230Net profit EUR
35.20%Win rate
3,778Trades
-4,079Max drawdown
2.18Avg trade

Best run of 8. DAX 40, 30 min, spread 3, from run sweeps:2026-10-12-DAX40-30m-opt.tsv:41.

Entry rules, long

  1. The close is above the prior close, and the prior close was below the close 2 bars earlier.
  2. The Stochastic %K (14 periods) is below its 3-period SMA and above 50 on the same bar.
  4. When both states are bullish and no long is open, the system buys 1 contract at market.

Entry rules, short

  1. The close is below the prior close, and the prior close was above the close 2 bars earlier.
  2. The Stochastic %K (14 periods) is above its 3-period SMA and below 50 on the same bar.
  4. When both states are bearish and no short is open, the system sells 1 contract short at market.

Exit rules

  2. When they no longer agree, an open short is bought back at market.
  3. The trailing line is used only as a signal state, so no separate stop or target is placed.

Test conditions

PeriodUp to 2026-10-12
InstrumentDAX 40, 30 minutes
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 run30 minn/a 3,77835.208,230 EUR-4,079
Nikkei 225Dailyn/a 20839.9031,557 USD-17,797
Silver4 hoursn/a 55736.6228,548 USD-14,262
Brent CrudeDailyn/a 9040.0019,629 EUR-6,266
US Crude OilDailyn/a 20538.058,035 EUR-7,744
Gold30 minn/a 3,34235.821,763 EUR-1,287
Gold4 hoursn/a 55437.181,326 EUR-1,038
Gold1 hourn/a 2,09536.181,243 EUR-989

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Reversal Pattern With ATR Trailing Line
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Trend
// Direction: Long & short
// Timeframe tested: 30 minutes
// ==============================================================

DEFPARAM CumulateOrders = false

ONCE stoch = 50
ONCE posrev = 0
ONCE postwo = 0
ONCE ts = 0

hh = highest[14](high)
ll = lowest[14](low)

52 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

ATRStochasticSMA
Read this firstKnown weaknesses2 points
  • No profit factor is available, because only sweep results exist for this strategy.
  • Results include the spread only. Commissions and overnight financing are not included.

Questions

About this strategy

Can I run Reversal Pattern With ATR Trailing Line 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 8 market and timeframe combinations. The best run by trade count was DAX 40, 30 minutes, with 3,778 trades.

How large was the drawdown?

The best run had a maximum drawdown of 4,079 EUR at the tested position size, against a net result of 8,230 EUR.

Does it trade long, short or both?

It trades both long and short.

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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