Price Action Candles R2.0

The Price Action Candles R2.0 indicator identifies and labels various price action candlestick patterns on the chart to assist traders in spotting potential reversals and trend continuations.

Usage

This tool can be used to scan for specific price action setups such as Pin Bars, Engulfing candles, and Inside Bars. By default, all pattern identifications are disabled, allowing users to enable only the specific signals relevant to their strategy. The script is particularly useful for identifying high-probability zones where price shows signs of rejection or momentum shifts.

The indicator uses ATR-based calculations for candle sizing, ensuring that the definitions of "small" or "large" bodies remain relative to current market volatility across different timeframes and asset classes, including Forex, stocks, and commodities.

Details

Price Action Candles R2.0 is an evolution of traditional price action identification. It incorporates several refinements:

• ATR-Based Scaling: Unlike static pip-based definitions, this version uses percentages of the Average True Range (ATR) to define candle characteristics.
• Trend Confirmation: Patterns like Hammers and Shooting Stars require preceding trend context and subsequent confirmation bars to reduce false signals.
• Precedence Logic: The script includes logic to prevent multiple overlapping labels, prioritizing the most significant pattern when multiple criteria are met.
• Visual Clarity: Patterns are labeled with abbreviated text (e.g., 'EN' for Engulfing, 'PB' for Pin Bar) to keep the chart uncluttered.

Settings

General Settings

• ATR Length: The period used to calculate the Average True Range for relative candle sizing.
• Maximum %ATR size for Body of Small Body Candle: Defines the upper limit for candles to be considered "small" (e.g., Dojis).
• Mininum %ATR size for Body of Lange Body Candle: Defines the lower limit for candles to be considered "large" (e.g., Engulfing).

Pattern Toggles

• Show Dark Cloud Cover / Piercing Line: Enables detection of these two-bar reversal patterns.
• Show Doji: Identifies candles with very small bodies relative to their range.
• Show Engulfing Candles: Toggles engulfing patterns; includes a "Strict" mode for outside bar requirements.
• Show Morning/Evening Star: Identifies three-bar reversal clusters.
• Show Hammers / Shooting Stars: Enables these pin bar variants with configurable confirmation bars.

Visuals

• Show Price Action Bar Names: Displays text labels above or below identified candles.
• Colour Price Action Bars: Changes the candle color based on the detected pattern type.

FAQ

How do I enable specific patterns?

You can enable specific patterns by opening the indicator settings and checking the boxes next to the patterns you wish to see (e.g., "Show Engulfing Candles"). By default, they are unchecked.

Why are some Hammers not being labeled?

This script uses strict criteria for Hammers and Shooting Stars, requiring a specific number of confirmation bars (1 or 2) and preceding trend movement to ensure the signals are higher quality.

How can I access Price Action Candles R2.0?

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