The 50 % rule pure price action

hi

i will share with you all my new findings for Forex

its called the 50 % rule

the candle must close past 50 % of previous candle within 2 candles and not close past high or low area

this is simple an EA would be good

im using EU on a 1 hour chart

you can try other pairs

my target is 15 pips on eu

an indicator would be good with the coded price action to color the candle on the trading set up

Can I have a guess at the entry?

On the Open of the next candle, right?

Do you filter candles to trade as virtually every one of them qualifies on the example chart but only 4 are marked?

An EA would take every signal so that needs to be defined and probably refined.

IMHO, ho ho ho

the price has to close 50 % of the previous candle ,

within 2 candles

if the candle closes past the high or low no entry

so the indicator or EA would need to enter on 50 % close past

For me

Hi ThaoAnh care to share the indicator or template
thank you

Any thoughts on optimal R:R, SL?

Is it for mobile or PC?

I think you forgot to say that the second candle must be the opposite of the previous one and "close past 50% of the previous candle and not close past the high or low area". Am I wrong?

I will try to code an indicator with A.I., but I can't promise anything because the results aren't always good.

WRONG

Can also be not opposite as in a trend continuation trade.

aka retracement and continuation price action

Am I wrong?

There are two indicators here, one for the bullish version and the other for the bearish version. I tried to combine them into a single indicator, but it only gives me bullish arrows. Clearly, not all alerts are valid, and a trend filter is needed.

I created a simple Pinescript indicator. you can paste it on tradingview' pinescript section. go to pinescript choose create new indicator and select all and paste the below code. then add it to the chart. I didnt add condition for 2 candles just 1 candle.

---------------------------------------------------
//@version=5
indicator("50% Retracement Reversal", overlay=true)

// Previous candle (candle 1)
prevOpen = open[1]
prevClose = close[1]
prevHigh = high[1]
prevLow = low[1]

// Current candle (candle 0)
currOpen = open
currClose = close
currHigh = high
currLow = low

// Calculate 50% level of previous candle
prevRange = prevHigh - prevLow
prev50Percent = prevLow + (prevRange * 0.5)

// BUY CONDITIONS
// 1. Candle 1 is bearish
prevBearish = prevClose < prevOpen

// 2. Candle 0 is bullish
currBullish = currClose > currOpen

// 3. Candle 0 closes between 50% of candle 1's range and candle 1's high
closesBetween50AndHigh = currClose >= prev50Percent and currClose <= prevHigh

// Combined buy signal
buySignal = prevBearish and currBullish and closesBetween50AndHigh

// SELL CONDITIONS (Reverse)
// 1. Candle 1 is bullish
prevBullish = prevClose > prevOpen

// 2. Candle 0 is bearish
currBearish = currClose < currOpen

// 3. Candle 0 closes between candle 1's low and 50% of candle 1's range
closesBetweenLowAnd50 = currClose <= prev50Percent and currClose >= prevLow

// Combined sell signal
sellSignal = prevBullish and currBearish and closesBetweenLowAnd50

// Plot signals
plotshape(buySignal, title="Buy Signal", location=location.belowbar, color=color.green, style=shape.triangleup, size=size.small)
plotshape(sellSignal, title="Sell Signal", location=location.abovebar, color=color.red, style=shape.triangledown, size=size.small)

// Optional: Plot 50% level of previous candle for visualization
plot(prev50Percent, title="Previous 50% Level", color=color.gray, linewidth=1, style=plot.style_cross)

// Alert conditions
alertcondition(buySignal, title="Buy Signal Alert", message="50% Retracement Buy Signal")
alertcondition(sellSignal, title="Sell Signal Alert", message="50% Retracement Sell Signal")

-----------------------------------------------------------------------------------

Three Supertrend

with supertrend

Please describe the rules in more detail. Preferably with pictures and explanations.
I will create an indicator and an expert so that everyone can try this system.

with macd

Hello, ThaoAnh. Can I ask you for a template for this chart?

In the first post, the author only highlights reversal movements in the figure. If we want to consider a retracement and trend continuation movement, in the instructions, I must consider two adjacent bullish or bearish candles. The instructions vary slightly.