Candles Patterns Indicator for MetaTrader^® 4

The idea behind the indicator

This is the information indicator which displays candle patterns on the chart. It works on any trading instrument that is available in MetaTrader^® 4.

The Candles Patterns indicator shows its name on the chart to recognize the candle pattern. If that pattern has more than one candle, the adviser will circle the square on this pattern.

The indicator simplifies the search for patterns, and you don’t need to peek in every bar. Candles Patterns will take care of it. All you need to do is monitor all of its signals and make the right choice.

Candles Patterns on the chart

Indicator parameters meanings

Input parameters

You can find plenty of parameters in Candles Patterns. It was done to ensure that the user could change the maximum appearance to their needs and preferences.

First, there are patterns of display parameters on history:

• Show by date – on-off keying to pattern display function since the given date;

• Date – date input field which would start the patterns display (it requires to turn on Show by date to work tentatively);

• Number of bars – the input field for sequence number from which display patterns will begin (if Show by date is disabled)

Common parameters – these are the general parameters to be used in every pattern.

• Use common parameters – common patterns will be used for all patterns if the parameter is on;

• Text font – text font name (needs manual input);

• Text size – the number of text size;

• Text distance – the distance from the bar to the text of the pattern;

• Text angle – the text slope;

• Line Thickness – the thickness of lines;

• Rectangle display – squares display (it works with patterns which use more than one candle)

Every pattern has its parameters that help to outline it of each other:

Visualization – parameter is responsible for pattern’s display on the chart

Visualization – parameter is responsible for pattern’s display on the chart;

• Text display – pattern’s name display;

• Text color – the color of the pattern’s name;

• Pattern text – input field of the pattern name (has the default name);

• Text font – text font name (needs manual input);

• Text size – the number of text size;

• Text angle – the text slope;

• Rectangle display – squares display (it works with patterns which use more than one candle);

• Rectangle color – the color of the square;

• Line Thickness – the thickness of lines;

• <PatternName>Style – the style line (it works only when Line Thickness = 1);

• Arrow Display – arrows display (it works when Text display is off).

Installation

This indicator installs in the MT4^® in a standard way. After the indicator's installation, it needs to be dragged on the currency pair chart with which you want to work. It will be better to set the time interval from an hour (H1) or more. There will be more false signals on the smaller intervals. It would be best if the indicator will be used on the daily (D1) interval. Then signals are obtained the most accurately.

How to work with an indicator?

The indicator searches the patterns that the user chose in the settings. After finding a pattern, it points the name on the chart if the pattern consists of more than one candle, and it marks these candles besides for better clarity.

This indicator would be the right decision for beginners, they won’t have to look at the chart all the time, and it helps to remember all of these patterns faster. This indicator will also be useful for skilled traders because they can determine the future trend’s destination based on the indicator’s signals more accurately.

The indicator can successfully determine more than 20 popular candle patterns.

The most popular are:

• Doji

The candle looks like a cross, an upside-down cross, or a «plus» symbol.

The Doji appearance in the candle analysis shows the market uncertainty. It’s like a tug-of-war between bulls and bears;

• Dark cloud cover

It is the bear reversal pattern of the candle analysis. The first candle is a bull's candle with a big body, and the second one is the bear with the open price that is higher than the close price and the close price that is lower than the midpoint of the body of the previous candle.

Such a model often appears when all of the positive is won back at the end of the news’s sudden speedy moves.

• Dragonfly Doji

It is the Doji candle with a long lower shadow and the missing higher. This pattern is one of the turn trend’s signals. The bulls no longer have the strength to breach the opening level and further growth. The signal was increased when there was a big upward candle before the advent of Doji.

• Gravestone Doji

Similar to the dragonfly Doji, this Doji has a very long higher shadow and is almost missing the lower one. The signal to the trend turns up particularly strong if a downward candle preceded it with a massive body.

• Engulfing pattern

It is the reversal pattern of the candle analysis that can be either bull and bear. The bear engulfing pattern has arisen on the upward trend while the bull engulfing pattern is downward. The first candle of the pattern is formed with a small body. The body of the second one fully covers or absorbs the body of the previous candle.

This situation shows that the previous trend’s strength is fully completed, and the trend’s turn is happening with a strong dynamic.

• Evening star

It is the bear reversal pattern of the candle analysis. The bull candle with a massive body has arisen on the upward trend, then the gap and the second candle with a small body. The third candle is closed lower than the midpoint of the first candle’s body.

This candle analysis model is due to a sudden trader’s mood change economically when the general positive move is interrupted by negative news. For higher time frames (Daily, Weekly), this behavior can testify for trading in a narrow range while waiting for the important occasion that should have the beneficial consequences that were expected.