“Forex Reversi” indicator & strategy

Hello everyone,

One of my friends rightly pointed out to me that the forex / stock exchange courses are a bit like a REVERSI (or OTHELLO) game.

Especially the forex courses that do not present gaps, except for weekends.

It is not wrong, when looking at a graph, even with the eye of a neophyte.

In fact, the goal of the game is to find a particular pattern, the one I had called (in one of my other articles dating back almost 3 years ago), a « Confirmed Engulfing ».

It is simply a “engulfing”, confirmed by a candle in the same direction.

When looking at this type of pattern, the idea is to buy (in case of bullish pattern) or to sell (in case of bearish pattern).

Logically, the stop loss is placed at the opposite end of the pattern.

What about the take profit ???

I used a take profit equal to the stop loss before realizing that this wasn’t really profitable.

Actually, as this pattern has a very large stop loss, the idea is to quickly close the position, as soon as a candle closes squarely above the entry point.

Obviously, the stop loss is much wider than the take profit.

But you will be surprised at the high success rate of this strategy !

I used it at my beginning, making some interesting gains.

On the other hand, the opportunities are relatively few, you have to watch several pairs on the forex / several indices (like DAX, CAC40, etc.)

You can even create a screener from the code.

Speaking of this one, I created the corresponding indicator, which highlights the patterns.

On the picture, the indicator is green when you have a “Reversi Bullish” pattern, and in red when you have a “Reverse Bear” pattern.

Here is the code (set the indicator to « Histogram », and configure the color as you wish) :

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