Consecutive count backtester / quantifytools- Overview
Consecutive counting is a simple method to mechanically define trending states to the upside and downside. Consecutive counts are calculated by taking reference price level (e.g. close 4 candles ago) and count closes above/below it up to a maximum count that resets the consecutive count back to 1. This tool provides the means to backtest each count by measuring % change in price after each count (e.g. % gain 2 candles after a given count).
Users can define reference source that starts the consecutive count (e.g. close 4 candles ago), maximum count where counter resets (e.g. after 9th count) and backtesting period (e.g. price change 2 candles after count).
Filters add extra conditions that must be met on the consecutive count to qualify as valid, which are also reflected on the backtest metrics. The counts can be refined using the following filters:
- RSI above/below X
- Price above/below/at moving average of choice
- Relative volume above/below X
Average gain corresponding to each count as they occur can be toggled off for less clutter. Average price change can also be visualized using candle color. Colors, gradient and table/label sizes are fully customizable.
- Practical guide
Example #1: Identify reversal potential
Consecutive counting is a simple yet effective method to for detecting reversals, for which 7-9 counts are traditionally used. Whether that holds true or not can now be put through a test with different variations of the method as well as using additional filters to improve the probability of a turn.
Example #2: Identify trend following potential
Consecutive counts can also have utility value for trend following. When historical short term change is to the downside, expect downside, when to the upside, expect upside.
Consecutivecandles
TTP Green/Red Consecutive CandlesThis indicator counts consecutive green/red candles offering some basic statistics and signals/alerts.
Features
- Counts consecutive green/red candles in an oscillator chart
- Moving average of the counting helps spotting when the consecutive candles are away from the mean. MA length and multiplier to adjust the signal sensitivity.
- Thresholds can be set to backtest and send alerts on any number of arbitrary consecutive candles of the same color.
- All time highs: the indicator keeps track of when the maximum has been reached
- Distribution data: the number of times each number of consecutive color candles has been reached is offered
Signals
- Threshold signal triggers when the number of candles of the same color is above the specified threshold.
- MA cross signal triggers when the number of candles of the same color is above the MA.
