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I like to use Candlestick Patterns for confirmation but they are sometimes
hard to spot as soon as they occur, especially in real time. So, here's a
little idea that you might find useful.
Create a new indicator called Candle Histogram (or whatever). We are now
going to populate this indicator with our favourite Candlestick Patterns as
follows:
If(BullHarami(),1,0);
If(BearHarami(),-1,0);
(This will eventually be plotted as a histogram. Note that 1 will give you
a bar above the zero line and -1 below representing bullish and bearish
patterns.)
Some Candle Patterns are only relevant in certain conditions so you can
modify them like this:
If(BullHaramiCross(),
(If(Mov(C,20,E)<Mov(C,50,E),1,0)),0);
If(BearHaramiCross(),
(If(Mov(C,20,E)>Mov(C,50,E),-1,0)),0);
If(EngulfingBull(),
(If(Mov(C,20,E)<Mov(C,50,E),1,0)),0);
If(EngulfingBear(),
(If(Mov(C,20,E)>Mov(C,50,E),-1,0)),0);
Some Patterns are more important than others so give them a higher profile
as follows:
If(MorningDojiStar(),
(If(Mov(C,20,E)<Mov(C,50,E),2,0)),0);
If(EveningDojiStar(),
(If(Mov(C,20,E)>Mov(C,50,E),-2,0)),0);
When you have finished, plot the indicator on any chart. Switch on the MS
Candlestick Expert Advisor and go through each pattern in turn (once only
for each), change the style to histogram (I like to increase the weight as
well) and give each pattern a different colour which will help you identify
it when it occurs.
Save the whole shebang as a template and apply as required. Any improvements?
Good trading,
Kevin
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