Hammer Hanging Man Patterns

[Apprentice]

Hammer Hanging Man Patterns.lua

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Theory.

Hanging Man
Hanging Man candlestick formation, is a bearish reversal candlestick pattern that occurs mainly at the top of uptrends and is a warning of a potential reversal.

Hammer
Hammer candlestick formation is a bullish reversal candlestick pattern that occurs at the bottom of downtrends and is a warning of a potential reversal.

Conditions
1. Long lower shadow should be at least twice the length as the real body.
2. Upper shadow is small or non-existent.
3. Direction of candles is not crucial.
It is Preferred that we have Down Candle for Hanging Man,
and Up Candle for Hammer Pattern.
4. Pattern occurs after a period of trend, and is indication of a potential reversal.
On Top for Hanging Man and on Bottom for Hammer.

The indicator was revised and updated

[MrDavide79]

Hello,
is it possible to have an strategy for this?

Thanks

[Apprentice]

Your request has been added to the development list.

[Apprentice]

Requested can be found here.
viewtopic.php?f=31&t=24509

[ev8383]

Thanks for the great indicator Apprentice.

Can you make signal that would detect hammer and handing man pattern?

Thanks

[speakinmymind]

Could you please allow the on/off option for “allow strategy to trade” to be automated based on the output of the TWO AVERAGES OSCILLATOR? This would eliminate most false signals.
For example, using the TWO AVERAGES OSCILLATOR, the output must be below -.00050 to allow trading with the long strategy and must be above .00050 to allow trading with the short strategy.
Also, if an order is open in one strategy, the other strategy should not interfere. If strategy Long has an open position, strategy Short should be restricted from trading until all long positions for that symbol have been closed. (This should at least be optional.)

Pairs Tested: USD/JPY; EUR/GBP; (still backtesting other pairs for hammer/hanging man settings)

Indicators used AND auto trading settings:
1. (FOR LONG) Hammer hanging Man Patterens (2.8, 28.0, 4) TP 55 SL 22 (Yes, Yes, Yes, No) (ALSO STRATEGY)
2. (FOR SHORT) Hammer hanging Man Patterens (2.1, 28.3, 4) TP 55 SL 22 (Yes, Yes, No, Yes) (ALSO STRATEGY)
3. MVA 880; MVA 165 and/or TWO AVERAGES OSCILLATOR (165, 880)
4. Tick Donchian 2000

For manual trading:
Long Scenario:
1. Hammer hanging Man Patterens man signals buy
2. 165MVA is below 880MVA and is closing about to cross ABOVE 880MVA
3. Enter long,
4. limit at 55 pips
5. stop at Donchian channel bottom, and adjust as needed manually
6. Manual exit when Hanging man signals sell AND 165MVA crosses BELOW 880MVA

Short Scenario:
1. Hanging man signals sell
2. 165MVA is above 880MVA and is closing about to cross BELOW 880MVA
3. Enter short,
4. limit at 55 pips
5. stop at Donchian channel top, and adjust as needed manually
6. Manual exit when Hanging man signals buy AND 165MVA crosses ABOVE 880MVA

[Apprentice]

Requests were added to the development list.

[speakinmymind]

could you please create a modified version of this that will restrict signals to only when the next candle does not touch the wick of the hanging man's candle?

[Apprentice]

Next candle body,
or Next candle should not have wicks all together.
You're aware that this will delayed the signal by one period.

[speakinmymind]

The next candle can have a wick or not. Either way, if price has not touched back into the hanging man's wick that should generate a signal.

I understand that this will delay the signal.

When price has completed its action away from the hanging man and reverses.

I will use the signal as the initial target of the reversal.