The Consecutive Ups and Consecutive Down strategies are momentum-based tools designed to identify and trade persistent price trends. They automate entries based on a simple count of sequential bars closing in the same direction.
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Consecutive Ups (Long Entry)
- Logic: Counts how many bars in a row have a Close price greater than the previous bar’s Close.
- Trigger: If the price closes higher for a user-specified number of bars (the ConsecutiveUps input), a buy order is generated.
- Execution: The long entry occurs at the open of the next bar immediately following the completed streak.
- Purpose: It is primarily used to “chase” established upward momentum in trending markets.
Consecutive Downs (Short Entry)
- Logic: Counts sequential bars where the Close price is less than the previous bar’s Close.
- Trigger: If the price closes lower for the number of bars defined in the ConsecutiveDowns input, a short entry is triggered.
- Execution: A sell short order is executed at the open of the next bar once the streak criteria are met.
- Purpose: Designed for “meltdown” scenarios or strong downtrends where price persistence is expected to continue.
Strategic Considerations
- Adjustable Sensitivity: The default for both is typically 3 bars, but this can be optimized in the TradeStation Strategy Settings for different timeframes.
- ShowMe Variations: TradeStation also offers “ShowMe” versions that visually mark these patterns on a chart without placing trades, helping users identify potential trend exhaustion or strength.
- Counter-Trend Use: While built for trends, some traders use these patterns as “anti-climax” indicators, betting that a long streak of up or down bars signals an overextended market due for a reversal.
