OPEN-SOURCE SCRIPT
Candle Patterns Ver.3

I am always studying strategies and one way to incorporate different strategies aiming to improve the chances to be on the right side of a trade.
This indicator has other indicators that together makes easy to spot a possible good trade.
It has:
- Bollinger Bands that give us the market volatility and can identify overbought or oversold levels;
- Stochastic: that give us market momentum and also overbought and oversold levels;
- Candle patterns: I just added the Pin bars(or Hammer at support) and Engulfing patterns. I noticed those 2 are the most reliable if spotted at the right place.
- Daily Trend direction: based on an EMA(200), one of the most reliable and used Moving averages.
- Round Numbers: This is always a good help before we place our trade to identify possible rejection levels or Support / Resistance levels.
So the idea here is, during the analysis, identify when a new candle open what was and where was the previous candle. I in general trade Daily charts and during tests I notice that when the previous bar closed at the lower BB, it was an Engulfing bar and the Stochastic %K was crossing %D below the 20 level I would say there is a 65 to 75% chance of the price move up, at least to test the middle BB. It is some kind of situation that does not happen very often but when happens is almost sure "money in the bank". So I added the Daily Trend as away to confirm the market direction or if it is just a pullback.
So to make my analysis easy and fast I added symbols telling me the story of the previous day like EG arrow for an engulfing bar, a big light blue arrow when the engulfing is close to the lower BB, an green(Stoch cross above below 20 level) and a red arrow(Stoch cross below at 80 level) with a TRUE text.
Of course it is not perfect but it helps me on my analysis. Also the Engulfing pattern can have different interpretations so keep that in mind. An I am working on make the arrows not appears on top of the others so be kind... :)
Please feel free to comment or criticize( in a good way).
You all have a great trading.
This indicator has other indicators that together makes easy to spot a possible good trade.
It has:
- Bollinger Bands that give us the market volatility and can identify overbought or oversold levels;
- Stochastic: that give us market momentum and also overbought and oversold levels;
- Candle patterns: I just added the Pin bars(or Hammer at support) and Engulfing patterns. I noticed those 2 are the most reliable if spotted at the right place.
- Daily Trend direction: based on an EMA(200), one of the most reliable and used Moving averages.
- Round Numbers: This is always a good help before we place our trade to identify possible rejection levels or Support / Resistance levels.
So the idea here is, during the analysis, identify when a new candle open what was and where was the previous candle. I in general trade Daily charts and during tests I notice that when the previous bar closed at the lower BB, it was an Engulfing bar and the Stochastic %K was crossing %D below the 20 level I would say there is a 65 to 75% chance of the price move up, at least to test the middle BB. It is some kind of situation that does not happen very often but when happens is almost sure "money in the bank". So I added the Daily Trend as away to confirm the market direction or if it is just a pullback.
So to make my analysis easy and fast I added symbols telling me the story of the previous day like EG arrow for an engulfing bar, a big light blue arrow when the engulfing is close to the lower BB, an green(Stoch cross above below 20 level) and a red arrow(Stoch cross below at 80 level) with a TRUE text.
Of course it is not perfect but it helps me on my analysis. Also the Engulfing pattern can have different interpretations so keep that in mind. An I am working on make the arrows not appears on top of the others so be kind... :)
Please feel free to comment or criticize( in a good way).
You all have a great trading.
Script open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.
Script open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.