Gap Down Reversal Strategy

█ STRATEGY OVERVIEW
The "Gap Down Reversal Strategy" capitalizes on price recovery patterns following bearish gap-down openings. This mean-reversion approach enters long positions on confirmed intraday recoveries and exits when prices breach previous session highs. This strategy is NOT optimized.

█ What is a Gap Down Reversal?
A gap down reversal occurs when:

• An instrument opens significantly below its prior session's low (price gap)
  
• Selling pressure exhausts itself during the session
  
• Buyers regain control, pushing price back above the opening level
  
• Creates a candlestick with:
  • Open < Prior Session Low (true gap)
  • Close > Open (bullish reversal candle)
  

█ SIGNAL GENERATION
1. LONG ENTRY CONDITION

• Previous candle closes BELOW its opening price (bearish candle)
  
• Current session opens BELOW prior candle's low (gap down)
  
• Current candle closes ABOVE its opening price (bullish reversal)
  
• Executes market order at session close
  

2. EXIT CONDITION

• A Sell Signal is generated when the current closing price exceeds the highest high of the previous seven bars (`close > _highest[1]`). This indicates that the price has shown strength, potentially confirming the reversal and prompting the strategy to exit the position.
  

█ PERFORMANCE OVERVIEW

• Ideal Market: High volatility instruments with frequent gaps
  
• Key Risk: False reversals in sustained downtrends
  
• Optimization Tip: Test varying gap thresholds (1-3% ranges)