Strategies / Pattern / Small Shadow Candle EMA

Small Shadow Candle EMA

The idea buys on a green candle with a small upper shadow closing above a 10 period EMA, and sells short on the red mirror. Trades close on a candle more than 0.2% beyond entry in the trade's direction.

PatternLong & shortSwingUSD/JPYDaily

n/aProfit factor

1,343,500Net profit USD

81.82%Win rate

715Trades

-466,200Max drawdown

1,879Avg trade

Best run of 1. USD/JPY, Daily, spread 1, from run sweeps:2026-10-04-USDJPY-D-opt.tsv:13.

Entry rules, long

The upper shadow (high minus close) is at most 5% of the candle range, and the range is above 0.
No long position is open.

Entry rules, short

The lower shadow (close minus low) is at most 5% of the candle range, and the range is above 0.
No short position is open.

Exit rules

A red candle closing below its open and more than 0.2% below the entry price closes the short.
An opposite signal reverses the position.

Test conditions

Period	Up to 2026-10-04
Instrument	USD/JPY, Daily
Spread	1 points
Starting capital	1,000,000
Costs	Spread only. Commissions and overnight financing are not included.
Bars	Up to 200,000 bars, fewer where the instrument has less history
Last tested	2026-10-04

Every run

Markets and timeframes tested

Market	Timeframe	PF	Trades	Win %	Net	Max DD
USD/JPYBest run	Daily	n/a	715	81.82	1,343,500 USD	-466,200

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

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

DEFPARAM CumulateOrders = false

ema = ExponentialAverage[10](close)
myRange = high - low

31 more lines: the entry and exit rules.

Setup

How to load it

Copy the code with the copy button on the code block.
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".
Paste the code, give the system a name and save it.
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.
It was only tested on USD/JPY, so there is no evidence from other markets.
The code sets no stop loss, so a losing trade stays open until an exit signal arrives.

Questions

About this strategy

Can I run Small Shadow Candle EMA 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, USD/JPY, Daily, with 715 trades.

How large was the drawdown?

The best run had a maximum drawdown of 466,200 USD at the tested position size, against a net result of 1,343,500 USD.

Does it trade long, short or both?

It trades both long and short.

Reversal Pattern With Chaikin Volatility

Uses the same indicator.

2.26 PF · 6,872 trades

Trend Surfer

Best run on the same market, USD/JPY.

1.04 PF · 10,813 trades

Breakout Reversal

Also a pattern strategy.

n/a PF · 459 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.com Stats Docs