Bjorgum Double Tap

The Bjorgum Double Tap indicator is a pattern recognition tool that identifies and executes trades based on Double Top and Double Bottom formations. It functions as both an automated strategy for backtesting and a real-time detection system with integrated support for third-party trading alerts.

Usage

The Usage section describes how the script can be used, focusing on identifying "M" (Double Top) and "W" (Double Bottom) shapes. The script tracks price action pivots to find instances where a swing high or low is tested twice without breaking.

Pattern Detection

The script uses a zig-zag method to filter price action. It connects swing highs and lows based on the "Pivot Length" setting. A pattern is confirmed when the price breaks the "neckline" (the center point of the pattern). Users can adjust the "Pivot Tolerance" to allow for slight variations in the height of the two peaks or troughs.

Trading and Execution

If "Use Strategy" is enabled, the script will simulate entries on the breakout of the neckline. It automatically projects a Take Profit (TP) level based on the "Target Fib" (defaulting to 100% of the pattern height) and sets a Stop Loss (SL) at the pattern's invalidation point.

Third-Party Alerts

The script is optimized for automated trading. Users can select from several destinations in the settings:

• Custom JSON: For web applications or custom APIs.
• Trading Connector: For routing trades to MT4/MT5.
• Alertatron/3Commas: Specifically for cryptocurrency exchange automation.
• Discord: For sending formatted pattern notifications to chat groups.

Details

The indicator utilizes Pine Script matrices to track pivot points and their corresponding bar indexes. This ensures that the script can monitor if a specific pivot has already been used in a trade, preventing duplicate signals on the same price structure.

The strategy is designed to avoid repainting by waiting for bar confirmation before triggering signals. For real-time execution, users can enable "Recalculate on every tick," though this is recommended only for forward testing as it may cause discrepancies between historical backtests and live alerts.

Settings

Detection and Trade Parameters

• Use Strategy: Toggles between an automated strategy with backtesting data and a simple visual indicator.
• Detect Bottoms/Tops: Enables or disables the detection of specific pattern types.
• Pivot Tolerance: The maximum allowable percentage difference between the height of the two pivots in a pattern.
• Pivot Length: The number of bars used to determine significant swing points.
• Target Fib: The profit target expressed as a percentage of the pattern's height.
• Stop Loss Fib: Adjusts the invalidation point relative to the pattern high/low.

Trailing Stop

• Use Trail Stop: Enables an ATR-based trailing stop once the initial target is reached.
• ATR Length/Multiplier: Parameters for calculating the volatility-based stop distance.
• Swing Lookback: The number of bars checked to find the recent high or low for trailing calculations.

Alert Strings

• 3rd Party: Dropdown to select the alert message format (JSON, Trading Connector, etc.).
• Passphrase/API Keys: Fields to input authentication data for specific trading bots.
• 3Comma Keys: Specific fields for entering start/end deal IDs for 3Commas bots.

FAQ

How do I use this as an indicator without taking trades? Disable the "Use Strategy" checkbox in the settings. This will display the patterns and levels on your chart without generating strategy performance metrics or simulated orders.

Can I use this for live automated trading? Yes, by selecting a third-party provider in the "Alert Strings" section and setting up a webhook alert using the {{strategy.order.alert_message}} placeholder.

How do I get access to the Bjorgum Double Tap? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.