I found myself trading strategies based on trend reversals and came to a conclusion that almost always applies. Usually if a trend reverses or at leasts corrects there will be a longer wick formed to create a new point of origin. The wick usually is very long. But what is very long? Let's dig deeper..
The wick from the body to the end of the wick can be measured in pips. If you now collect data from all the wicks in the past on a certain timeframe you'd get an average pipcount from body to wick end on that specific timeframe.
If we could identify this, it might be a good indicator for trend reversal/correction strategies.
It could be interesting to see the average pip lengths of a wick in correlation with the trend change.
A scenario:
Let's assume the average pip length of the wick before a change of direction is 15+ pips on the H4. It would help us to only take trades in the opposite direction if we see wicks of 15+ pips in the future.
Now I am not really capable of programming but maybe anyone likes this idea and we could create the indicator or even create a dashboard for it.
Creative note: We might call the indicator WICKtor or WICKthor.
Cheers!
