8 High Probability Bulkowski Candlestick Patterns

Forums ProRealTime English forum ProBuilder support 8 High Probability Bulkowski Candlestick Patterns

  • This topic has 11 replies, 5 voices, and was last updated 5 years ago by avatarBard.
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  • #94507

    Updates to Violets’ “Trend Reversal and Continuation Patterns:” https://www.prorealcode.com/prorealtime-market-screeners/trend-reversal-continuation-patterns/

    For the Morning Star pattern I have striked out the trend filter to highlight the effect that the trend mode can have (in that it can result in patterns not being produced on chart).

    Bulkowski Performance Statistics for each of the 8 Patterns in the Indicator (and more) : https://www.dropbox.com/s/0gq5ypd6gwc3h7e/Bulkowski%20-%20PERFORMANCE%20RANKINGS%20-%20Encyclopedia-of-Candlestick-Charts.pdf?dl=0

    In the case of the very rare and highest probability pattern, the Bearish Three Line Strike Up, it actually produced a 683 times initial risk per/ tick return  in Canadian Pacific Railways (US) Ltd that I traded as an experiment of the patterns behaviour. “Beginners” luck, lol…

     

    #94509

    Good job Bard 😉

    1 user thanked author for this post.
    #94510
    #94519

    A few observations since posting earlier:

    A few small errors have been fixed like making sure all the a1, a2’s have been utilised in the Draw Text code.

    I’m not sure the effect of have two sets of a1= etc and a2= etc, and t1= t2= etc overlapping conditions for two different patterns (Abandoned Baby’s and Three Line Strikes) both patterns appear on chart (and when applied as a separate indicator below the price chart) but I have reposted the amended code below with different conditional letters.

    I think it’s better to strike out // the Trend Rules to produce more patterns and you can use your own judgement as to the direction of trend. I’ve left the Trend code in with strikes.

    Note: 7. Abandoned Baby had two x TrendDown’s.

    The Morning Star rules can be relaxed as I see in my code I included a more extreme LongCandle = Body > (RangeSize * 0.9) when I was testing it.
    0.7 is fine.

    Another addition has been added (that I spotted from my Dropbox pdf link) : Three White Soldiers. 

    It has strong directional  probabilities although performance isn’t always strong post pattern.. better for Scalpers.
    (Note: In the Top Movers Screener there are Candlestick pattern and you can set the “Criteria” from “Completed” to “Current.” I can’t vouch for their accuracy in construction/coding or Bulkowski’s performance statistics).

    Bulkowski’s Candlestick Descriptions and Performance Statistics can be found on his site:

    http://thepatternsite.com

     

     

    2 users thanked author for this post.
    #94543

    Wow you’ve had a buy weekend Bard …. thank you for sharing your good work!

    Cheers
    GraHal

    1 user thanked author for this post.
    #94569

    Cheers @GraHal, it needed to be done!
    I’m still referring to those Dropbox pdf stats above and Bulkowski’s book so I may add some more Higher Probability Patterns later like the Bearish Engulfing (bottom of list) which is a Bearish Reversal 79% of the time in a Bull Market and 82% in a Bear.

    1 user thanked author for this post.
    #94747

    Hi Bard,

     

    really good job on this code. I am not a big fan of Bulkowsky to be honest (I am not really sure about he checks facts) but definitely your code is awesome!!

     

    G

    1 user thanked author for this post.
    #94923

    Hey, I forgot to add this. Bulkowski also says that “Most of the time, candles that showed the highest post breakout move began their life within the lowest third of the yearly price range. Here are the results.”. In his website he says that 84% of the reverse candles starting in the lowest third of the yearly price range are successful….food for thoughts.

    #95024

    Cheers, appreciated @Gabri, I was thinking along the same lines and making sure I had defined a Bull and Bear Market as per Bulkowski. I also added some moving averages codes and started on a “simple” indicator… lol.. but got stuck with the ALMA moving average programming (not a programmer) but that’s all fixed now thanks to help on this forum from Nicolas and Roberto:

    https://www.prorealcode.com/topic/help-creating-bull-market-indicator-with-a-custom-indicator/#post-94935

    Now another indicator to spot prices in a 1/3 of their yearly highs and lows would be handy too!

    #95052

    Now another indicator to spot prices in a 1/3 of their yearly highs and lows would be handy too!

    Try this:

    It counts how many bars are in a year by comparing today’s date to the first bar on a chart. Once a year has past it knows how many bars are in a year (so it can be used on any time frame). It then finds the highest high and the lowest low in that number of bars and so can then know what the top 1/3rd level is and the bottom 1/3rd level is.

    Not fully tested and written in a hurry!

    #95062

    I first coded the indicator in my last post using for next loops and then while wend loops to get it to accurately only test the highs and lows in exactly the last year but it was incredibly slow to get a result. The version in the last post has the disadvantage that if the first year on a chart is a leap year then the number of bars it uses for all future years will be the number in a leap year but I felt it was accurate enough that the extra speed to calculate overcame the potential for inaccuracy.

    1 user thanked author for this post.
    #95065

    Wow, nice going @Vonasi, thanks very much for coding that and thank you @Gabri.

    Here is a Dow Chart that now shows another very interesting way of looking at the market. I’d been using Std Deviations, Linear Regression[60], R-Squared and ALMA 200 in blue and also Std Error Bands. But this gives a great indication of risk/returns and strength. I’ve also added the Bull/Bear ALMA indicator in the second image of the last 18 months of turbulence on the Dow. 👌👌

    As great as all the ingenuity that goes into these excellent indicators on PRC,  remember:

    As hunter gatherers our survival depended upon traits that have become hard wired into our DNA. We seized opportunity (food) when it presented itself and as we also stood our ground in adversity.

    Both those traits spell disaster for a trader!

    Friday evening, philosophical Bard.

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