Trading signal: create your own candlestick patterns
This signal allows traders to define and visualize their own candlestick patterns.
|Time frame(s)||: All|
|Usable for buy signals||: Yes|
|Usable for short sell signals||: Yes|
A candlestick pattern is defined in two steps. In the first step the trader details the trading hours and the type of signal he is interested in. In the second step the trader defines the group(s) of candles. As usual all parameters can be set in the Designer Dialog window.
Define the trading hours. The trading hours are defined by a start time and an end time. If you only wish to detect your candlestick pattern in the morning you can, for example, enter 0900 and 1200. If the trading hours are not relevant to you, leave the settings on 0 and 2359.
Define the signal type. A signal can either be a buy signal or a short sell signal. A buy signal is 1. A short sell signal is 2.
Define the number of groups. Up to four groups of candles are possible. Group 1 is the oldest group. Group 4 is the most recent group. The groups are distinguished by grey backgrounds in the chart.
This example shows four groups containing one candle each.
Example 1. You want to find all candlestick patterns which consist of four successive green candles of about equal size. Define four groups of one candle each. The direction of each group is upwards. Each group contains only one positive candle. This already partially defines the four codes as 111x. The candles also need to be about the same size. Hence the codes become 1119.
Example 2. You want to find a Doji (candle with no body) followed by three positive candles. Define two groups. One for the Doji. One for the three positive (green) candles. Notice that a Doji per definition will always have the code 100x. The codes for the two groups are 1000 and 3110.
Example 3. You want to find four negative (red) candles followed by two positive (green) candles. Define two groups. One for the negative candles. One for the positive candles. If the relative height of the groups is not relevant to you, the codes are 4229 and 2110.
Example 4. Similar to Example 3 you want to find four negative (red) candles followed by two positive (green) candles. However, in this example, you want the positive group to be less than half (4/9) the height of the negative group. This requirement changes the codes to 4229 and 2114.
When to open a position?
A buy signal appears when the candlestick pattern you defined is confirmed. A short sell signal appears when the candlestick pattern you defined is confirmed.
Remember: by using the TacticOrder tool you automate these signals in a simple way without any programming.