A Rejection Candle forms when price probes a level but fails to hold beyond it, leaving a long wick and small body.
Such candles indicate an attempt to move in one direction was firmly rejected by the market.
The strategy enters in the opposite direction of the wick once the candle closes, expecting price to reverse back through the range.
Stops are set outside the rejected high or low to cap risk, and trades exit if momentum fails to materialize.
Entry Criteria: pattern match
Long/Short: Both
Exit Criteria: stop-loss or opposite signal
Stops: Yes, percent based
Default Values:
CandleType = 15 minute
StopLoss = 2%
[*]Filters:
Category: Pattern
Direction: Both
Indicators: Candlestick
Stops: Yes
Complexity: Intermediate
Timeframe: Intraday
Seasonality: No
Neural networks: No
Divergence: No
Risk level: Medium