Capitulation Detector Strategy

A multi-factor capitulation detector designed to identify exhaustion points in extended trends. It focuses on fading capitulation moves after multi-leg trends with extreme volume and price extension.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
THE CONCEPT
Capitulation occurs when the last holders give up — panic selling into lows or euphoric buying into highs. These moments create asymmetric opportunities because:

Sentiment becomes maximally skewed
Weak hands are flushed out
Price deviates far from equilibrium
The "fuel" for continuation is exhausted


━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
THE 6 FACTORS

Trend Persistence — Price stays on one side of 38 EMA for 12+ bars, confirming a sustained directional move
Acceleration — Price stays on one side of 5 EMA for 3+ bars, showing the move is accelerating into exhaustion
Volume Spike — Current bar volume ≥ 2x the 20-bar average
Body Expansion — Candle body ≥ 1.5x average, showing conviction/panic in the move
Extension — Price is 2+ ATR away from the 38 EMA, indicating overextension from equilibrium
Multi-Leg Structure — At least 3 consecutive lower lows (for longs) or higher highs (for shorts)

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
SIGNAL LOGIC

Bullish Capitulation: 4+ factors align + price below 38 EMA + down candle + volume spike
Bearish Capitulation: 4+ factors align + price above 38 EMA + up candle + volume spike

The strategy enters counter-trend, fading the exhaustion move.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
EXIT OPTIONS

ATR-based stop loss (default: 2 ATR)
ATR-based take profit (default: 3 ATR)
Optional trailing stop
Time filter for session-specific trading

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
BEST PRACTICES

Works best on liquid instruments with clean trends
More reliable after 3+ legs in the trend
Higher conviction when daily AND intraday timeframes align
"The bigger and more extended, the better"
Consider VWAP as additional confirmation (not coded here)

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
SETTINGS GUIDE

Min Score: Increase for fewer, higher-quality signals
Volume Spike Multiplier: 2x; increase for stricter filter
Extension ATR: Higher values = more overextended setups only
Trend Bars Min: Higher values = longer established trends required

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
ALERTS

Bullish Capitulation (potential long)
Bearish Capitulation (potential short)

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
DISCLAIMER
This is a counter-trend strategy — inherently higher risk than trend-following. Always use proper position sizing and risk management. Backtest thoroughly on your specific instruments and timeframes.