Trading based on candles

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Sai Pratap
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There are many candle patterns like tweezers, engulfing candles etc. If we can automate EA to identify these patterns on higher time frames, can give good risk reward trades.

Advantages : 

1. Can use for scalping also with lower time frames.

2. No chance of blowing off the account as the risk is limited.

3. Risk reward can go upto 1:10 depending in the time frame and candle pattern.

4. Possibility of extending targets with trailing SL/ till next opposite signal candle.

I guess this is not difficult to implement in the EA.

I just gave an example with tweezer bottoms and top in the below screenshot. Like this we can catch many trades with candle patterns.

If we can club this with TDI, Identify with open on cumulative signal, the results will be wonderful.

If this idea gets thru, will add some more suggestions on how we can improve this technique or what options are required while building the code. Thanks.

Image 1195

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Price Action tools

Hello. 

Please add some price action tools like Support and Resistance or Breakout or etc... 

MA + Engulfing bar on XAUUSD

I have an idea that works on Xauusd 5Min TF

EMAs 8, 21 or 21,50

engulfing bar

1.buy rule

We consider buying signal only if we are in uptrend. Once we touch the 8Ema or 21Ema, we wait until we have a confirmation or engulfing, we enter buy position.

2. Sell rule

We have to be in downtrend

Same rules apply to sell

Stop loss above the engulfing + 5-15 pip

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Andrey Khatimlianskyi
Quote from Sai Pratap

Sir,

I have collected few patterns.

Candle stick patterns.docx


Also found below helpful.

https://www.tradingwithrayner.com/candlestick-patterns/


Let us start with these and add more as time progresses.

Sai, I can't do this job instead of you...

To implement these patterns to the EA I need formulas, not links.

Three Line Strike can be described as:

  • Close[4] < Open[4]
  • Close[3] < Open[3]
  • Close[2] < Open[2]
  • Close[1] > Open[4]

(1st bar is the last closed bar, 2nd — previous one, and so on).

What do you want to do with this signal?

Open buy when pattern is formed? Allow buys after any buy-pattern till any sell-pattern?

Please, describe idea in details so I can just write the code )

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Sai Pratap

Got u sir.

Then I shud prepare formulae for each of the candle patterns. Let me try sir.

It will not be so simple though.

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Andrey Khatimlianskyi

Exactly, it is a lot of work. Let me know when you're ready!

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Hannes Waser

The goal to formalize the candle stick pattern is not so easy to achieve. Given the requirement is should be a working pattern matcher.

there are different approaches out there which are known to work.

1) process the candles to some low level code and compare the codes. 

alldata_2018_2_10_80026.pdf


2) use the ohlc values normalized in a short sequence (e.g. 5 candles normalizing to the first one) and match via KNN ljc_mj_jk_ao_acs2014.pdf


3) using the "time dynamic warp" algorithm to find similar patterns in time series (most advanced one).sustainability-10-04641 (1).pdf



feel free to reach out if you have questions on that.

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Andrey Khatimlianskyi
Quote from Hannes Waser

The goal to formalize the candle stick pattern is not so easy to achieve. Given the requirement is should be a working pattern matcher.

there are different approaches out there which are known to work.

1) process the candles to some low level code and compare the codes. 

alldata_2018_2_10_80026.pdf


2) use the ohlc values normalized in a short sequence (e.g. 5 candles normalizing to the first one) and match via KNN ljc_mj_jk_ao_acs2014.pdf


3) using the "time dynamic warp" algorithm to find similar patterns in time series (most advanced one).sustainability-10-04641 (1).pdf



feel free to reach out if you have questions on that.

Thanks for the useful information!

I guess we should find ready-made indicator or library to implement it to the CP.

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Sai Pratap
Quote from Andrey Khatimlianskyi

Exactly, it is a lot of work. Let me know when you're ready!

Sure sir. Will work out and come back on it.

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Hannes Waser
Quote from Sai Pratap

Sure sir. Will work out and come back on it.

Sai, have you seen some ready-to-use libraries available on mql.com?

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Sai Pratap
Quote from Hannes Waser

Sai, have you seen some ready-to-use libraries available on mql.com?

Never pondered over it sir. Will need to now.

Long time back, I have come across few indicators which highlight when these patterns are formed.

Need to find them now and check whether the code is available for them.

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Sai Pratap

These pages are covering most of the widely used candle stick patterns. Let us start with these. If any more required, I will work out on formula and can be added later sir. 

Would be wonderful if these can be indicated on chart while trading.

Thanks a lot.


https://help.tc2000.com/m/69445/l/800589-bullish-candlestick-patterns-formulas-table

https://help.tc2000.com/m/69445/l/800590-bearish-candlestick-patterns-formulas-table

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Hannes Waser

Sai, the application of these looks quite nice! :)

Do you have experience how reliable one can scan and exploit the patterns?