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

Duplicates 2
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

Replies 48
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Tarso Mastella

I believe the best solution for this is to use the Custom Indicator and then user can create/develop its own candle pattern and apply to signal.

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1
Ulises Cune
Quote from Tarso Mastella

I believe the best solution for this is to use the Custom Indicator and then user can create/develop its own candle pattern and apply to signal.

Could someone create an indicator based on these candles and use it at CP >= 2.49

https://www.mql5.com/en/code/324

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Sai Pratap
Quote from james

The very first EA I commissioned used a simpler method of candlestick analysis, and I got some interesting results -

The EA was told to look for Big Candles in any direction, but with limits on the ratios between the OHLC


E.g. if the wicks were too extreme in relation to the bar it didn't open, but if they were small enough it would open a reversal trade. It was actually a lot simpler than I wanted it, but I imagine added to the plethora of other filters in CP it could get some interesting results


There's no drawdown because it uses small stop losses (10.5% WR)

The inputs to get the attached results were:


EURUSD M15 

01.01.2008 - 10.08.2022 so 14 years' data

This was only using fixed lots so growth with margin % would be exponential


(Previous candle):
Min Candle body: 10pips

Max Candle body: 20pips

Max Candle Wick (either end): 5pips


Open opposite direction of previous candle movement

SL: 2pips

TP: 20pips

There's one thing I will say I'm not sure about - the spread. Anything more than a spread of 2 and it doesn't work. Hopefully I'm right in thinking in MT4 (didn't know I should have commissioned for MT5) this global spread setting means 0.2pips, which as far as I know isn't unreasonable for EURUSD trading? Any comments welcome

Perhaps add settings related to wick sizes / wick to body ratios in Big Candle settings?

And as Sai is suggesting, more methods of analysing previous candles, which I've suggested before


Thanks!

James

Plz share the set file for study and recommendations.

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crifox
Quote from Sai Pratap

Plz share the set file for study and recommendations.

good morning trader, I would like to submit to you a fairly simple system based on H1 candles.

Based on the trend movement, long or short, the ea will have to find a very specific sequence of candles as shown in the picture:

is this feasible for you?

if the trend is short the sequence should be red candle + green candle + red candle.

If the trend is short it will be the opposite green candle + red candle + green candle.

Do you have any idea how it can be realized? I perform it by hand and it works very well

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Sai Pratap
Quote from crifox

good morning trader, I would like to submit to you a fairly simple system based on H1 candles.

Based on the trend movement, long or short, the ea will have to find a very specific sequence of candles as shown in the picture:

is this feasible for you?

if the trend is short the sequence should be red candle + green candle + red candle.

If the trend is short it will be the opposite green candle + red candle + green candle.

Do you have any idea how it can be realized? I perform it by hand and it works very well

Before implementing to CP, I could see that risk reward is really bad here! But accuracy can be good.

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james
Quote from Sai Pratap

Plz share the set file for study and recommendations.

This was an EA commissioned independently so doesn't use CP / a set file for CP. The main point I was making was it uses more in-depth big candle analysis because it had options for setting limits on the wick to bar. I don't think this would be a big change to make in the Big Candle filter section, we could perhaps start exploring candles in more detail by adding Max Wick Size options in the big candle filter, which I've put in a separate suggestion post, would appreciate a vote up there if you're curious to explore these results further, in general, like you, I'd like to see more in-depth candle analysis, particularly the tweezer pattern

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Nilkumar Sharma
Quote from Sai Pratap

Before implementing to CP, I could see that risk reward is really bad here! But accuracy can be good.

Maybe we can have an option to set minimum Risk: Reward ratio.

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drago babnik

The problem with the Candle stick pattern is that we need the ability to define many parameters.

1. We need to define at least 5 candles,

2. For each candle we need

- upper wick (> or < from "pips")

- lower wick (> or < from "pips")

- body (green or red) (> or < from "pips")

Visual observation is much easier than defining all this with a mathematical expression.

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Ulises Cune

Hello Sai, you can now use patterns on Japanese candles like a CustomIndy.

Here you have one:

https://www.earnforex.com/metatrader-indicators/candlestick-pattern-indicator/

Surely it won't be difficult to configure.