Three candle reversal

Checked October 2026

A three-candle reversal trades a new extreme that fails, and a close back through the prior candle. The public version comes from the @BestForexMethod posts, built on Victor Sperandeo's 2B. Backtoast ran it on gold. The 5-minute version failed our test, losing 13.4% a year over 5,506 trades.

Backtoast

You pay $99 for two full tests of your own strategy, and a pass is an offer of 30% of the profit Backtoast makes trading it with its own money.

Three candle reversal

For a long, price makes a lower low and then a candle closes back up through the high of the candle before that low, with other bars allowed in between. It trades 5-minute candles, and only when the 15-minute chart agrees, with price above its triangular average and Bollinger midline and RSI over 50. The stop goes at the extreme and the target is the same distance the other way. Shorts are the mirror.

The posts take profit at the next level or a few pips, and draw trendlines and supply zones by eye. A test needs a number, so the run used a target equal to the stop.

The same failed-extreme idea on daily bars is Turtle Soup.

When it works

A failed new high or low is a mean-reversion trade, so it pays in range-bound sessions where breaks keep failing and loses in a strong trend. Traders like it for the defined risk, because the stop sits at the extreme and the loss on a wrong trade is known before entry. A slower direction chart, like the 1-hour in place of the 15-minute, keeps more trades with the bigger trend, and a draft can test that before you spend a full test.

Origins

The setup comes from @BestForexMethod's public posts and videos, which build on Victor Sperandeo's 2B, a new high or low that fails. There's no paper, and the account's own post claims about 11% on a $100,000 account in two and a half days. The run traded spot gold from late 2021 to October 2026, and holding gold made about 17% a year over the same stretch.

The run is Backtoast's, from 29 October 2026, after costs.