Confirmation candle: wait for a pullback from the peak before shorting

Updated:

The confirmation candle filter stops the Snapback bot from shorting a coin until its price has moved down from a recent peak by the percentage you set. The idea is simple: shorting a spike that is still going is dangerous, so the bot waits for the first signs of a reversal.

What it means in plain words

When a coin is pumping, it can keep rising for a long time. If you open a short right at the surge, the price can easily keep going up and hit your stop. The filter requires the price to have already dropped a little from the highest point of the recent period. It does not guarantee a reversal, but it weeds out coins that are clearly still gaining height.

Why it exists

A pump on its own does not mean the surge is over. The "pullback from the peak" is a simple check of whether anything has changed yet: if the price has barely moved off the top, the risk that the move continues is higher.

How it works in the code

The bot takes the last bars_15m closed 15-minute candles (30 by default, which is 7.5 hours) and finds the highest high among them. The pullback is (high - current price) / high x 100. The current price is the close of the one-minute candle that just closed. If the pullback is smaller than "Pullback from the peak, %", the signal is rejected. If fewer closed 15-minute candles exist than needed, the signal is also rejected, with an explanation in the journal.

Illustration of the mechanism only, not advice: the highest high over 7.5 hours is 110 and the price is now 108.9, a pullback of 1%. With a 1.5% threshold the signal is rejected; with 0.5% it passes to the next check.

In the wizard you see only the checkbox and the pullback field. The number of 15-minute candles (30) cannot be changed there and always equals the default from the code.

Allowed values and defaults

  • On/off: on by default.
  • Pullback from the peak, %: 1.5 by default; in the wizard the minimum is 0.1 with a step of 0.1.
  • Number of 15-minute candles: 30 (in the code only, not in the wizard).

What happens if it is higher or lower

  • Bigger pullback: the bot enters only after a more visible reversal, so there are fewer signals. The short price may already be worse, because part of the drop has been missed.
  • Smaller pullback: a weaker filter and more signals, but more of them are coins that have not finished their spike.
  • Filter off: there is no reversal check at all.

How it connects to other settings

  • Pump threshold: it must trigger first.
  • Not ATH: a different protection against coins that are breaking through their ceiling.
  • Entry price: the "At the chart level" mode targets the pump peak, not this candle.

Common mistakes

  • Treating the pullback as the percentage drop the bot expects. It is only a requirement for the moment of entry.
  • Setting a very large percentage and wondering why there are almost no signals.
  • Forgetting that a new coin may not have enough 15-minute candle history.

Where to find it in the bot wizard

The "New bot" or "Edit" form, the "Coin filters" block. On the left is the "Confirmation candle" card with a checkbox (caption "don't short until the price has moved away from the peak") and the "Pullback from the peak, %" field, which appears when the box is ticked.

Frequently asked questions

What is a confirmation candle in a short-selling bot?

It is a filter that blocks a short until the price has moved down from a fresh peak by at least the percentage you set. It is how the bot checks that the spike seems to have stopped.

How many percent of pullback should I set?

We do not push any particular number. A bigger pullback means later and rarer entries; the trade-off is described in this article. The minimum allowed value is 0.1.

Can I turn the confirmation candle off?

Yes, it is a checkbox. Without it the bot can short a coin that is still rising.

Why did the bot skip a coin that had already pumped?

One possible reason: at the moment of the signal the price was still too close to the peak of the recent 15-minute candles. The journal shows this as a rejection by the confirmation candle.

Read also

Pump threshold: how far a coin must rise before the bot shorts itThe Pump 'rise' setting in the Snapback bot: the minimum percentage a coin must climb inside the window before the bot considers shorting it.Not ATH filter: don't short a coin at its all-time highThe Not ATH filter in the Snapback bot: it skips coins breaking their 60-day high. How the ceiling is calculated and what the buffer does.Short entry price: where the bot places its sell orderThe 'How we enter' setting in the Snapback bot: the limit price of the short order, the 'At the chart level' mode and +1.5%, +2.5%, +4% offsets.Crypto pump and dump: what it isCrypto pump and dump explained: how a coin gets pumped, why it falls back, how a bot detects a pump, and why shorting it is risky.