Volume Climax Reversal Strategy

Volume Climax Reversal seeks turning points marked by extremely high volume after a strong trend. Such climactic spikes suggest exhaustion as the last buyers or sellers rush in before momentum fades.

Testing indicates an average annual return of about 82%. It performs best in the stocks market.

The strategy enters against the prior move once a large volume bar closes and price begins to retrace.

A tight percent stop protects the position, and trades exit if volume fails to drop off or price continues in the original direction.

Details

• Entry Criteria: indicator signal
• Long/Short: Both
• Exit Criteria: stop-loss or opposite signal
• Stops: Yes, percent based
• Default Values:
  • CandleType = 15 minute
  • StopLoss = 2%
• Filters:
  • Category: Volume
  • Direction: Both
  • Indicators: Volume
  • Stops: Yes
  • Complexity: Intermediate
  • Timeframe: Intraday
  • Seasonality: No
  • Neural networks: No
  • Divergence: No
  • Risk level: Medium