Candlesticks Patterns Identified

The Candlesticks Patterns Identified indicator automatically detects and labels classic candlestick formations on the chart to assist traders in spotting potential reversals and trend continuations.

Usage

The Usage section describes how the script can be used to identify specific market conditions. By default, the tool identifies Doji, Bearish Harami, Bullish Harami, Bearish Engulfing, Bullish Engulfing, Piercing Line, Bullish Belt, and both Bullish/Bearish Kickers.

Labels and arrows are plotted directly on the chart to indicate the presence of a pattern. Green upward arrows indicate bullish signals, while red downward arrows indicate bearish signals. These visual cues allow for rapid identification across multiple timeframes without the need for manual analysis.

The tool uses a "Trend in Bars" lookback filter to ensure patterns are relevant to the prevailing trend. For instance, a bullish engulfing pattern is only valid if the price is lower than it was a specified number of bars ago, filtering out "clutter" in non-ideal market conditions. Users can adjust this trend sensitivity or set it to 1 to see all patterns regardless of the preceding trend.

Details

The script is built upon logic originally developed by HPotter and Robert N., focusing on the mathematical relationships between the open, high, low, and close of consecutive candles.

The "Trend in Bars" logic functions by comparing the current open price to the open price of a candle $n$ bars back. This ensures that bullish patterns are identified after a localized downtrend and bearish patterns after a localized uptrend. The Doji detection is based on the absolute difference between the open and close relative to the total candle range, allowing for a customizable threshold of what constitutes a "thin" body.

Settings

• Trend in Bars: Sets the lookback period to determine the current trend direction. The script compares the current open to the open $x$ bars ago to validate reversal patterns.
• Doji size: Defines the maximum percentage of the candle's total range that the body (open to close) can occupy to be classified as a Doji.
• Toggle Patterns: Users can individually enable or disable specific patterns (Harami, Engulfing, Piercing Line, etc.) via the indicator's style settings to reduce chart clutter.

FAQ

How do I adjust the sensitivity of the trend filter? You can modify the "Trend in Bars" input. Increasing this value requires a longer sustained move before a pattern is validated, while setting it to 1 will show all patterns regardless of the prior move.

Why are some patterns not showing up on lower timeframes? Patterns like the Piercing Line and Kickers often rely on price gaps. These occur more frequently on daily charts or symbols with lower liquidity, and may not appear on continuous intraday charts.

How can I access Candlesticks Patterns Identified? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.