Candlestick pattern blocks : how they work
Two new blocks are now available on the Kryll strategy editor, and they are very different from what you are used to when developing your strategies. These two blocks are based on candlestick patterns, whether it's a candlestick pattern or more simply candle color analysis.
Note that these blocks are not necessarily meant to be used on their own, but associated with their "friendly" blocks, they will undoubtedly make your life easier! For example, combine them with a "Bollinger bands" block to avoid false positives, or try to use them to identify a trend, the choice is yours now!
Block candle green/red
This block is triggered according to the size, series and color of the candles. You can thus detect, for example, a large red candle or a series of 2 consecutive small green candles.
How to configure it :
Analysis period: Unit of time of the candles you want to analyze.
Color of Candle: The color of the candle that will trigger the block. It can be red or green.
Note: If the block starts on a red candle and you want the block to be triggered on a green candle, it will wait for the next candle to close and then evaluate whether it is a green or red candle. If the block starts on the color you have chosen, it will be triggered instantly.
Minimum threshold: Minimum percentage of augmentation/diminution of the candle compared to the opening price. This feature is useful to avoid false positives.
Note: If the parameter "consecutive candles" is set to more than 1, all candles must have the same color and reach at least the minimum threshold.
Consecutive candles: Number of times the candles must be of the defined color and size to trigger. For example, if you choose to detect a series of 4 "Red" candles, then 4 consecutive red candles will trigger the block.
Tips
This block can be used to confirm a trend (e.g. 3 large green candles in a row) or to take a position. Try to use it with the support/resistance or price blocks to identify real breakouts and avoid false positives!
Block Pattern One Candle
This block contains most of the candle pattern that exist and is triggered when the chosen pattern (or family of patterns) is detected.
How to configure it :
Analysis period: Unit of time to analyse candles, when a pattern is detected, it will always be triggered after the candle is closed. This is to avoid false positives.
Pattern to detect: Type of pattern to be used among those available presented below.
Note: Any Bearish Pattern and Any Bullish Pattern means that any form of bearish (reddish background) or bullish (greenish background) pattern will trigger the block.
There are many online guides on how to use candle patterns, as each one has its own particularities. These shapes ("pattern") are not "buy" or "sell" signals as such, it always depends on the situation in which the "pattern" occurred.
Together is better!
These two complementary blocks can also be used successively: a "Doji" can be detected after a succession of "x" green candles, in order to confirm a trend reversal.
You might also use them together in an AND block to detect the color of the Doji / Dragonfly Doji / Gravestone Doji as this can have a different meaning depending on the color.
It's up to you to adapt your blocks to the market now that you have all the tools in hand to succeed!
Try them now for free! https://platform.kryll.io
As usual, we strongly advise you to combine signals before taking a position in a strategy and to avoid using only one type of indicator.
Happy trading!
Useful links:
Gravestone Doji : https://www.tradingindepth.com/gravestone-doji-candlestick/
Dragonfly Doji : https://www.tradingindepth.com/dragonfly-doji-candlestick/
Doji : https://commodity.com/technical-analysis/doji/
Inverted hammer : https://commodity.com/technical-analysis/inverted-hammer/
Hammer : https://commodity.com/technical-analysis/hammer/
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