Candlestick Reversal Patterns V1

The Candlestick Reversal Patterns V1 indicator identifies thirteen distinct bullish and bearish candlestick reversal formations to help traders spot potential trend shifts in real-time. This tool automates the detection of complex price action structures, allowing users to focus on confirmation and execution rather than manual pattern recognition.

Usage

The Usage section highlights how to interpret the various detected patterns on the chart. When a reversal pattern is identified, the script plots a shape (triangle up for bullish, triangle down for bearish) and colors the corresponding bars to draw attention to the potential trend change.

Users should use these signals as a starting point for analysis rather than standalone entry triggers. It is highly recommended to wait for confirmation, such as price action at the next opening or closing candle, to validate the reversal. For example, if a "Morning Star" appears, traders often look for the following candle to trade above the high of the pattern. Because common patterns like Engulfing and Harami appear frequently, users can toggle them off in the settings to reduce chart noise and focus on rarer, high-conviction formations.

Details

This script implements specific technical definitions for various Japanese candlestick patterns:

• Single/Double Bar Patterns: Engulfing, Harami, Piercing Line, Dark Cloud Cover, Belt Hold, Meeting Line, and Kicking.
• Multi-Bar Formations: Morning Star, Evening Star, Three White Soldiers (Aka Sanpei), Three Black Crows (Sanba Garasu), Three Stars in the South, Stick Sandwich, and Ladder Bottom.

The logic relies on relative price positions (Open, High, Low, Close) and historical bar comparisons to ensure the mathematical criteria for each pattern are met before a signal is generated.

Settings

• Show Engulfing: Toggles the display of Bullish and Bearish Engulfing patterns.
• Show Harami: Toggles the display of Bullish and Bearish Harami patterns.
• Show Piercing Line / Dark Cloud Cover: Enables detection of these two-bar trend reversal patterns.
• Show Morning / Evening Star: Toggles the detection of three-bar star reversal patterns.
• Show Belt Hold: Enables the identification of opening marubozu-style reversals.
• Show Three Soldiers / Crows: Displays the Three White Soldiers (bullish) or Three Black Crows (bearish) patterns.
• Show Three Stars South: Toggles the "Three Stars in the South" bullish reversal pattern.
• Show Stick Sandwich: Enables detection of the Stick Sandwich reversal formation.
• Show Meeting Line: Toggles Bullish and Bearish Meeting Line patterns.
• Show Kicking: Enables the identification of the high-momentum Kicking reversal pattern.
• Show Ladder Bottom: Toggles the detection of the five-bar Ladder Bottom reversal.

FAQ

How do I use these patterns for trading?

These patterns signal potential exhaustion in the current trend; however, they should always be used in conjunction with other technical analysis tools like support/resistance levels or volume for better accuracy.

Can I reduce the number of signals on my chart?

Yes, you can use the settings menu to disable high-frequency patterns like Engulfing or Harami if you find they are creating too much noise for your specific strategy.

How can I access Candlestick Reversal Patterns V1?

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