Candlestick Pattern Scores for a Candle Emotion Index Strategy

Summary

This strategy excerpt builds indicator scores from candlestick shapes over a configurable lookback. Its indecision score counts doji and spinning top candles, while a fear score counts shooting stars, hanging men, and bearish engulfing patterns. Each pattern is identified through ratios involving candle bodies, wicks, and, for engulfing candles, the previous candle’s body. The inputs allow the lookback length and each pattern threshold to be adjusted.

The script also defines settings for a volume multiplier, a signal cooldown, maximum holding time, and an earlier exit when a position exceeds a loss threshold. These controls suggest that the strategy combines pattern signals with volume and trade management, but the supplied text cuts off before showing how those pieces determine entries and exits. It offers no backtest results, market selection, or evidence that the pattern scores predict returns. The candlestick definitions and thresholds are configurable heuristics, so their usefulness would need to be assessed across instruments and market conditions.

Key ideas

• The indecision score summarizes doji and spinning top frequency over a configurable lookback.
• The fear score combines counts of shooting star, hanging man, and bearish engulfing patterns.
• Pattern thresholds are based on candle body and wick proportions, with engulfing patterns also compared against the previous candle.
• The excerpt lists volume, cooldown, holding period, and loss exit settings but does not show the complete trading rules or performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.