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The Black Candles strategy continues to perform well

Free daytrading strategy.

The Black Candles strategy is a day trading strategy that we like very much for three reasons: Firstly, it is very effective in exploiting trend reversals that occur during a trading day. Second, it is equipped with a unique stop and target pair that protects while being able to capture large movements. Finally, while we praised its profitability on the Mini Dow last month, the Black Candles strategy has continued to perform well this month. This excellent performance makes it doubly attractive to investors looking for a proven day trading strategy.

This FREE demo of the NanoTrader platform includes the Black Candles strategy

The Black Candles strategy explained


The Black Candles strategy produces effective trend reversal signals as in the example below. The trend we are referring to is defined by the red or green bands. When the market is down, the band is colored red. When the market is rising, the band is colored green. The signal, in the example below, identified by the green triangle, is triggered, following the reversal of the trend, after a given number of candles. The investor can back-test this parameter easily. 

Trading with candles

When you think about it carefully, you can see that the Black Candles strategy, applied in a 1 minute candlestick chart, is composed of only four elements which are: the Black Candles signal, the Flat filter, the stop and the target. Each element can be adjusted according to a few parameters as can be seen in the Designer Bar below. This limited number of elements makes the Black Candles strategy simple to set up. 

Free trading strategy, good performance?

The setting of the Black Candles strategy, in the example above, is very close to the one shown during a recent webinar. An important advantage of the NanoTrader platform is that it allows you to quickly search for the best possible settings and instantly measure their impact on profit.

To look for a good setting, you can trust one of the stars of the NanoTrader platform, the sensitive analysis function. The latter analyzes the impact on the profit of a parameter of a strategy as in the example below where we analyzed the impact of the parameter AggregationFactor. This parameter, which is one of the most important of the Black Candles strategy, is optimal with a value of 6.

Trading strategy sensitivity analysis.

The setting of the Black Candles strategy, in the example above, is very close to the one shown during a webinar given on June 4th and which can be reviewed in video on our Youtube channel. An important advantage of the NanoTrader platform is that it allows you to quickly search for the best possible settings and instantly measure their impact on profit.

Backtesting in the trading platform.

How do you explain this success? Firstly, we have chosen to deal only on the upside because the Dow Jones has been bouncing strongly since the end of March. Second, we took the risk of not limiting ourselves to the US session and starting trading as early as 4:00 am. Finally, when there were strong upward movements, the Black Candles strategy was able to exploit a good part of them thanks to its trailing stop and target. The reasons for the strategy's current success are illustrated in this example which shows the different long signals over the course of a day and their impact on profit.

Free strategies in the trading platform.

In conclusion, we very much appreciate the Black Candles strategy because it is well suited to trending markets and particularly to indices. Of course, a minimum investment is required to learn how to use the tools of the NanoTrader platform such as the incredible sensitive analysis function. This investment will help us every time a changing market requires an adaptation of the strategy. So good luck to Black Candles strategy users!

More about the Black Candles strategy


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