Binary Option Arrows (example)

The Binary Option Arrows (example) indicator detects Bullish and Bearish Harami candlestick patterns to provide entry signals for binary options while visually tracking win/loss outcomes based on a configurable expiration timeframe.

Usage

The Usage section describes how the script can be used, examples should be provided in this section. This section also focuses on how main settings affect the indicator interpretation and output.

Signal Identification

The indicator automatically plots green up-arrows for Bullish Harami patterns (Call signals) and red down-arrows for Bearish Harami patterns (Put signals). These signals serve as potential entry points for binary options trades.

Outcome Tracking

The indicator evaluates the success of each signal by highlighting the chart background. A green background indicates a "win," meaning the price moved in the predicted direction after the specified expiration period. A red background indicates a "loss," where the price failed to move in the predicted direction or remained flat at the end of the expiration.

Adjusting Expiration

By modifying the "Expiry" setting, users can visualize how different trade durations affect the success rate of the Harami patterns. For example, setting the expiry to 5 will check the price status 5 bars after the signal was generated.

Details

The indicator is constructed using specific logic for Harami candlestick patterns and outcome verification:

• Bullish Harami Logic: Identified when a large bearish candle is followed by a smaller bullish candle contained within the previous candle's body, occurring after a downward trend (measured by comparing the open price five bars ago).
• Bearish Harami Logic: Identified when a large bullish candle is followed by a smaller bearish candle contained within the previous candle's body, occurring after an upward trend.
• Backtesting Logic: The script compares the closing price at the time of the signal to the closing price at the end of the expiryInput period. If the price is higher for a Call or lower for a Put, it is marked as a win.
• Alerts: The script includes built-in alert functionality for both Bullish and Bearish Harami setups, optimized to trigger once per bar close.

Settings

• Expiry: Defines the number of bars to wait before calculating whether a signal resulted in a win or a loss. This mimics the expiration time found in binary options trading.

FAQ

Which candlestick patterns does this indicator detect? This specific version is configured to detect Bullish and Bearish Harami patterns combined with a basic trend filter.

Can I use this indicator for different expiration times? Yes, you can adjust the "Expiry" input in the settings menu to match your preferred binary options contract duration (e.g., 1-bar, 5-bar, or 15-bar expiries).

How do I access Binary Option Arrows (example)? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.