The reverse candle indicator is a masterpiece of time analysis. You can use this indicator as a valid confirmation for reversal systems, and you can have it alone as a very powerful trading system.
Strategy (can be used at 1 and 5-time frames):
Add a simple Tenkensen (average of 9 periods) to the chart as shown in the picture Look for the histogram with the number 6 in the time of one minute or look for the histogram with the number 5 in the time of 5 minutes.
The number 5 means that the reverse conditions are provided in the time of five minutes and 4 times higher. After finding this number, wait for the close of a candle after tenkan.
It takes the magic numbers of Ichi Moku (for example 9 26 52…) from the input and analyzes it multi-time and gives a special score to each candle, which is the reverse power of that candle. The higher this number is, the more likely it is to reverse.
Application :
You can check the possibility of reversal with this tool if the price hits any pivot or support/resistance point. It has a role like a divergence or braking.
Settings :
There is an item called (intelligent display of the number of histograms), if it is active, it will only show histograms with a strong reverse probability.
If you use this tool alone strategically, it is better to be active, but if you use this indicator as a confirmation for your trading system, it is better to be inactive.
From the next item, you can determine the minimum power of the histogram that can be displayed.
Important point :
Until the close of the candle under the tenken, the maximum price in the candle with the histogram should not be hit by the next candle.
After the close, we move the stop price to the top of the candle with a histogram and we close part of the volume with risk to reward one by one and trail the rest.
The risk to reward of this system is at least 1 to 2, and in the best case, it can reach more than 1 to 10 with proper trailing.
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