Double bottom or double top

rama · Mon, 15 May 2017 11:21:57 +0000

Can you one help me with code for double bottom or double top? I want the code on any time frame 5 or 20 min or 60 min.

This topic has 47 replies, 1 voice, and was last updated 2 years ago by steve_.

Tagged: double bottom, double top

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10/29/2017 at 8:50 AM #50803

Yannick

Hi Leo

Do you already try to apply your indicator to a strategy by selling stop or buying stop ?

Regards

Yannick

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10/30/2017 at 6:27 AM #50870

Leo

Yannick wrote:

Hi Leo Do you already try to apply your indicator to a strategy by selling stop or buying stop ? Regards

Not yet

Leo

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10/30/2017 at 6:47 AM #50871

Leo

Hi all,

I was working in the detection of double top and double bottom (W&M).

I solve the issue of repeating the locas max and min by adding another condition
It knows where the pattern is activated or cancelled
It draws an arrow in possible places to open a trade
It still having a strange signal when the markets moves very quickly (but I don’t have any idea why is drawing a very strange triangle)

But I do not know yet how will be the ideal W and M pattern, I wonder why there are so many false double top or double bottoms. I though it was the most reliable technical pattern.

Hope I heard from you

//LOCALS MINIMUMS AND MAXIMUMS USING LEO MOVING AVERAGE
//Autor: LEO

//VARIABLES TO BE OPTIMIZED

//PERIOD=20    //Period for analysis
//Kdouble=0.2 //Factor for defining what is double top or bottom

//-----------

//Leo Moving Average, formula: LMA= WMA+(WMA-SMA)
LMA=2*weightedaverage[period](close)-average[period](close)

//Smoothed curve of Leo Moving Average
IF BARINDEX > period THEN
smoothLMA=weightedaverage[period](LMA)
ELSE
smoothLMA=undefined
ENDIF

// Direction or trend of the LMA

//once LMAdirection=1
IF BARINDEX > period THEN
IF LMA > smoothLMA THEN
//LMAdirection=1
//colors
r=0
g=130
b=0
ELSE
//LMAdirection=-1
r=200
g=0
b=0
ENDIF
ENDIF

// << Storage of minimums and maximums >>
once mintemp=low
once posmintemp=1
once maxtemp=high
once posmaxtemp=1

IF BARINDEX>2 THEN
// the value 0.7 is to ensure that the donchian channel is faster than the curves analysis (this value to be checked)
IF low < lowest[round(0.7*period)](low[1]) THEN
mintemp=low //minimum temporal
posmintemp=BARINDEX //postition of minimum temporal
ENDIF
IF high > highest[round(0.7*period)](high[1]) then
maxtemp=high //maximum temporal
posmaxtemp=BARINDEX //position maximum temporal
ENDIF
ENDIF

//  << Detecting and locating a local minimums >>
//  Where the LMA is crossing the smoothed LMA, there is a maximum or minimum nearby
//  If there is a new local min/max, the preivus one is stored in de varible B... (before)
once LEVMIN=low
once POSLEVMIN=1
once LEVMAX=high
once POSLEVMAX=1
once bullcross=0
once bearcross=0

IF BARINDEX > PERIOD THEN //For avoid computer errors
bullcross=LMA crosses over smoothLMA
bearcross=LMA crosses under smoothLMA
ENDIF


IF bullcross and POSLEVMIN<>posmintemp  THEN
BLEVMIN=LEVMIN        //previus local minimum is saved
BPOSLEVMIN=POSLEVMIN
LEVMIN=mintemp
POSLEVMIN=posmintemp
support=LEVMIN
DRAWARROWUP(POSLEVMIN,LEVMIN) coloured(0,0,0,30)
ENDIF

// --> Detecting and locating a local maximum
IF bearcross and POSLEVMAX<>posmaxtemp THEN
BLEVMAX=LEVMAX       //previus local maximum is saved
BPOSLEVMAX=POSLEVMAX
LEVMAX=maxtemp
POSLEVMAX=posmaxtemp
resistance=LEVMAX
DRAWARROWDOWN(POSLEVMAX,LEVMAX) coloured(0,0,0,30)
ENDIF

support=min(low,support)
resistance=max(high,resistance)


// << DETECTING DOUBLE TOP OR BOTTOMS  >>

once WidthDoubleTop = high-low
once WidthDoubleBottom = high-low
once Wpattern=0
once Mpattern=0


//  <<<<<<  Double bottoms   >>>>>>>>>

//looking for the top between two local minimums
IF bullcross THEN
doublebottomtop=high[BARINDEX-POSLEVMIN+1] // we start looking for the top in between two local minimums
POSdoublebottomtop=BARINDEX-POSLEVMIN+1
FOR i = (BARINDEX-POSLEVMIN+1) to (BARINDEX-BPOSLEVMIN-1) DO
IF high[i] > doublebottomtop THEN
doublebottomtop=high[i]
POSdoublebottomtop=BARINDEX-i
ENDIF
NEXT
WidthDoubleBottom = doublebottomtop-(BLEVMIN+LEVMIN)/2 // (top betwen local minimums) - (average of the las two local minimums)
IF abs(BLEVMIN-LEVMIN) < Kdouble*WidthDoubleBottom THEN
// we have a double bottom
Wpattern=1
else
Wpattern=0
ENDIF
ENDIF

//   <<<<<<<<<<  Double tops    >>>>>>>

//looking for the bottom between two local maximums
IF bearcross THEN
doubletopbottom=low[BARINDEX-POSLEVMAX+1]
POSdoubletopbottom=BARINDEX-POSLEVMAX+1
FOR i = (BARINDEX-POSLEVMAX+1) to (BARINDEX-BPOSLEVMAX-1) DO
IF low[i] < doubletopbottom THEN
doubletopbottom=low[i]
POSdoubletopbottom=BARINDEX-i
ENDIF
NEXT
WidthDoubleTop=(BLEVMAX+LEVMAX)/2 -doubletopbottom
IF abs(BLEVMAX-LEVMAX) < Kdouble*WidthDoubleTop THEN
// we have a double top
Mpattern=1
else
Mpattern=0
ENDIF
ENDIF

//    <<<<<<<<<<  DOUBLE TOP AND DOUBLE BOTTOM FOR TRADING  >>>>>>>>


myATR=AverageTrueRange[2*period](close)

IF Wpattern=1 THEN
IF close > (doublebottomtop+myATR) or close < (LEVMIN-0.5*myATR) THEN
Wpattern=0 //  <<<< double bottom has been activated or it was cancelled >>>>>
ELSE
//       <<<<<<<  HERE WE HAVE A DOUBLE BOTTOM FOR TRADING  >>>>>
DRAWTRIANGLE(POSLEVMIN,LEVMIN,POSdoublebottomtop,doublebottomtop,BPOSLEVMIN,BLEVMIN) COLOURED(0,255,0,200)
DRAWARROWUP(BARINDEX,low) coloured(0,255,0,100)
DRAWRECTANGLE(BPOSLEVMIN,doublebottomtop+WidthDoubleBottom,POSLEVMIN,doublebottomtop+WidthDoubleBottom-Kdouble*WidthDoubleBottom) coloured(0,120,0,255)
DRAWTEXT("Target",(BPOSLEVMIN+POSLEVMIN)/2,doublebottomtop+WidthDoubleBottom,SansSerif,Bold,13)coloured(0,120,0,255)
ENDIF
ENDIF

IF Mpattern=1 THEN
IF close < (doubletopbottom-myATR) or close > (LEVMAX+0.5*myATR) THEN
Mpattern=0 //double top has been activated or it was cancelled
ELSE
//       <<<<<<<  HERE WE HAVE A DOUBLE TOP FOR TRADING  >>>>>
DRAWTRIANGLE(POSdoubletopbottom,doubletopbottom,POSLEVMAX,LEVMAX,BPOSLEVMAX,BLEVMAX) COLOURED(255,0,0,200)
DRAWARROWDOWN(BARINDEX,high) coloured(255,0,0,100)
DRAWRECTANGLE(BPOSLEVMAX,doubletopbottom-WidthDoubleTop,POSLEVMAX,doubletopbottom-WidthDoubleTop+Kdouble*WidthDoubleTop) coloured(200,0,0,255)
DRAWTEXT("Target",(BPOSLEVMAX+POSLEVMAX)/2,doubletopbottom-WidthDoubleTop,SansSerif,Bold,13)coloured(200,0,0,255)
ENDIF
ENDIF


RETURN LMA coloured(r,g,b,200) AS "LMA", support[1] coloured(140,0,200,250) style(DOTTEDLINE,1) as "support[1]", resistance[1] coloured(0,0,250,250) style(DOTTEDLINE,1) as "resistance[1]", smoothLMA coloured(r,g,b,200) style(DOTTEDLINE,1) as "smooth LMA" //, lowest[round(0.7*period)](low[1]), highest[round(0.7*period)](high[1])

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//LOCALS MINIMUMS AND MAXIMUMS USING LEO MOVING AVERAGE

//Autor: LEO

//VARIABLES TO BE OPTIMIZED

//PERIOD=20 //Period for analysis

//Kdouble=0.2 //Factor for defining what is double top or bottom

//-----------

//Leo Moving Average, formula: LMA= WMA+(WMA-SMA)

LMA=2*weightedaverage[period](close)-average[period](close)

//Smoothed curve of Leo Moving Average

IF BARINDEX > period THEN

smoothLMA=weightedaverage[period](LMA)

ELSE

smoothLMA=undefined

ENDIF

// Direction or trend of the LMA

//once LMAdirection=1

IF BARINDEX > period THEN

IF LMA > smoothLMA THEN

//LMAdirection=1

//colors

r=0

g=130

b=0

ELSE

//LMAdirection=-1

r=200

g=0

b=0

ENDIF

// << Storage of minimums and maximums >>

once mintemp=low

once posmintemp=1

once maxtemp=high

once posmaxtemp=1

IF BARINDEX>2 THEN

// the value 0.7 is to ensure that the donchian channel is faster than the curves analysis (this value to be checked)

IF low < lowest[round(0.7*period)](low[1]) THEN

mintemp=low //minimum temporal

posmintemp=BARINDEX //postition of minimum temporal

ENDIF

IF high > highest[round(0.7*period)](high[1]) then

maxtemp=high //maximum temporal

posmaxtemp=BARINDEX //position maximum temporal

ENDIF

// << Detecting and locating a local minimums >>

// Where the LMA is crossing the smoothed LMA, there is a maximum or minimum nearby

// If there is a new local min/max, the preivus one is stored in de varible B... (before)

once LEVMIN=low

once POSLEVMIN=1

once LEVMAX=high

once POSLEVMAX=1

once bullcross=0

once bearcross=0

IF BARINDEX > PERIOD THEN //For avoid computer errors

bullcross=LMA crosses over smoothLMA

bearcross=LMA crosses under smoothLMA

ENDIF

IF bullcross and POSLEVMIN<>posmintemp THEN

BLEVMIN=LEVMIN //previus local minimum is saved

BPOSLEVMIN=POSLEVMIN

LEVMIN=mintemp

POSLEVMIN=posmintemp

support=LEVMIN

DRAWARROWUP(POSLEVMIN,LEVMIN) coloured(0,0,0,30)

ENDIF

// --> Detecting and locating a local maximum

IF bearcross and POSLEVMAX<>posmaxtemp THEN

BLEVMAX=LEVMAX //previus local maximum is saved

BPOSLEVMAX=POSLEVMAX

LEVMAX=maxtemp

POSLEVMAX=posmaxtemp

resistance=LEVMAX

DRAWARROWDOWN(POSLEVMAX,LEVMAX) coloured(0,0,0,30)

ENDIF

support=min(low,support)

resistance=max(high,resistance)

// << DETECTING DOUBLE TOP OR BOTTOMS >>

once WidthDoubleTop = high-low

once WidthDoubleBottom = high-low

once Wpattern=0

once Mpattern=0

// <<<<<< Double bottoms >>>>>>>>>

//looking for the top between two local minimums

IF bullcross THEN

doublebottomtop=high[BARINDEX-POSLEVMIN+1] // we start looking for the top in between two local minimums

POSdoublebottomtop=BARINDEX-POSLEVMIN+1

FOR i = (BARINDEX-POSLEVMIN+1) to (BARINDEX-BPOSLEVMIN-1) DO

IF high[i] > doublebottomtop THEN

doublebottomtop=high[i]

POSdoublebottomtop=BARINDEX-i

ENDIF

WidthDoubleBottom = doublebottomtop-(BLEVMIN+LEVMIN)/2 // (top betwen local minimums) - (average of the las two local minimums)

IF abs(BLEVMIN-LEVMIN) < Kdouble*WidthDoubleBottom THEN

// we have a double bottom

Wpattern=1

else

Wpattern=0

ENDIF

// <<<<<<<<<< Double tops >>>>>>>

//looking for the bottom between two local maximums

IF bearcross THEN

doubletopbottom=low[BARINDEX-POSLEVMAX+1]

POSdoubletopbottom=BARINDEX-POSLEVMAX+1

FOR i = (BARINDEX-POSLEVMAX+1) to (BARINDEX-BPOSLEVMAX-1) DO

IF low[i] < doubletopbottom THEN

doubletopbottom=low[i]

POSdoubletopbottom=BARINDEX-i

ENDIF

WidthDoubleTop=(BLEVMAX+LEVMAX)/2 -doubletopbottom

IF abs(BLEVMAX-LEVMAX) < Kdouble*WidthDoubleTop THEN

// we have a double top

Mpattern=1

else

Mpattern=0

ENDIF

// <<<<<<<<<< DOUBLE TOP AND DOUBLE BOTTOM FOR TRADING >>>>>>>>

myATR=AverageTrueRange[2*period](close)

IF Wpattern=1 THEN

IF close > (doublebottomtop+myATR) or close < (LEVMIN-0.5*myATR) THEN

Wpattern=0 // <<<< double bottom has been activated or it was cancelled >>>>>

ELSE

// <<<<<<< HERE WE HAVE A DOUBLE BOTTOM FOR TRADING >>>>>

DRAWTRIANGLE(POSLEVMIN,LEVMIN,POSdoublebottomtop,doublebottomtop,BPOSLEVMIN,BLEVMIN) COLOURED(0,255,0,200)

DRAWARROWUP(BARINDEX,low) coloured(0,255,0,100)

DRAWRECTANGLE(BPOSLEVMIN,doublebottomtop+WidthDoubleBottom,POSLEVMIN,doublebottomtop+WidthDoubleBottom-Kdouble*WidthDoubleBottom) coloured(0,120,0,255)

DRAWTEXT("Target",(BPOSLEVMIN+POSLEVMIN)/2,doublebottomtop+WidthDoubleBottom,SansSerif,Bold,13)coloured(0,120,0,255)

ENDIF

IF Mpattern=1 THEN

IF close < (doubletopbottom-myATR) or close > (LEVMAX+0.5*myATR) THEN

Mpattern=0 //double top has been activated or it was cancelled

ELSE

// <<<<<<< HERE WE HAVE A DOUBLE TOP FOR TRADING >>>>>

DRAWTRIANGLE(POSdoubletopbottom,doubletopbottom,POSLEVMAX,LEVMAX,BPOSLEVMAX,BLEVMAX) COLOURED(255,0,0,200)

DRAWARROWDOWN(BARINDEX,high) coloured(255,0,0,100)

DRAWRECTANGLE(BPOSLEVMAX,doubletopbottom-WidthDoubleTop,POSLEVMAX,doubletopbottom-WidthDoubleTop+Kdouble*WidthDoubleTop) coloured(200,0,0,255)

DRAWTEXT("Target",(BPOSLEVMAX+POSLEVMAX)/2,doubletopbottom-WidthDoubleTop,SansSerif,Bold,13)coloured(200,0,0,255)

ENDIF

RETURN LMA coloured(r,g,b,200) AS "LMA", support[1] coloured(140,0,200,250) style(DOTTEDLINE,1) as "support[1]", resistance[1] coloured(0,0,250,250) style(DOTTEDLINE,1) as "resistance[1]", smoothLMA coloured(r,g,b,200) style(DOTTEDLINE,1) as "smooth LMA" //, lowest[round(0.7*period)](low[1]), highest[round(0.7*period)](high[1])

4 users thanked author for this post.

Al,

swapping,

Nicolas,

Paris

Leo

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11/02/2017 at 8:36 AM #51262

Nicolas

Leo wrote:

But I do not know yet how will be the ideal W and M pattern, I wonder why there are so many false double top or double bottoms. I though it was the most reliable technical pattern.

How could we know in advance if a lower low could be THE lower low in the next candles? That’s not possible, even if you wait enough time to confirm the pattern, the price will certainly make its own way without consulting you and your pattern detection indicator 🙂

Nicolas

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11/02/2017 at 12:59 PM #51302

Leo

Hi Nicolas,

…but this is not what we all pursue here with the technical anlysis: trying to see the past in order to “guess” what will hapend in the future?

Now that we have a code that detects local lows and high (while after it has formed), what are the ideal characteristic for defining a winner double top/bottom ??? What a human Traders see in a perfect double M or W?

I am thinking in the possibility to open an order limit after the double top/bottom is activated or confirm, but then we lost the opportunity to entry if there is not pullback…

Leo

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11/02/2017 at 3:10 PM #51326

Nicolas

Yes, but technical analysis patterns are purely visual ones. Only a deep statistical analysis of signals of your own M/W patterns detector associated with a good money management should give you an edge on market.

Nicolas

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11/02/2017 at 4:59 PM #51340

Leo

That’s sound like a plan!

… it will be my life changer challenge!

I hope many people here can help me to achieve that.

Leo

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11/02/2017 at 5:08 PM #51341

Nicolas

Making pseudo statistical analysis is possible through the optimiser of ProBacktest:

Define different scenarios on how to confirm an order at market, depending of your double top and double bottom indicator
Optimise the variables (could be any criteria depending of the trading strategy itself) for each of the different strategy in a way to compare their results between them

Nicolas

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11/13/2017 at 6:40 AM #52497

gabri

Leo,

I l ove your approach to compare a weighted moving average with a simple moving average. This is the way to go and I’ll try to open a post discussing why this is the best setup to have. Keep working on it because your work so far is extremely interesting and promising in terms of double top/bottoms recognitions.

Gabri

gabri

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11/13/2017 at 7:30 AM #52498

Leo

Thanks for the comment Gabri.

I still analysing the double top/bottom that my indicator detects (things like symmetry, previous lows and highs, long term bias, etc). I saw that those patters are very unreliable, but produce an effective movement in the market though. Normally this strategy is a profit/risk ratio of 1:1… but barely happened (or I do not know yet when).

Here’s a reflexion for all: will you trade an strategy which profit/risk ratio of 0.5 or less like 0.3 with a very high chances of winning trades?

… by mathematics the answer is “yes of course”. But in real life imagine a robot who have 4 winning trade in a row an then it lost the next one and it takes the profit of the previous 3 trades… it can be hard for the moral.

what’s your opinion?

Leo

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11/17/2017 at 6:47 AM #53080

Leo

Hi all, I open a new topic for discuss an specific strategy I wrote

https://www.prorealcode.com/topic/double-top-bottom-hunter/

Leo

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04/29/2018 at 5:26 PM #69383

guinsu2000

hello what’s the name of this indicator on MY4 please ?

guinsu2000

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04/30/2018 at 7:37 AM #69406

jebus89

@Elsborgtrading How is the harmonic patterns looking in backtest? 🙂

jebus89

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05/01/2018 at 8:55 AM #69542

GraHal

jebus89 wrote:

@elsborgtrading How is the harmonic patterns looking in backtest?

Kasper Elsborg has not been seen around these parts for nearly 12 months (?).

I’d love to know how he (and a few other defectors to MT4 etc) have got on in their pastures new?? 🙂

Jebus, maybe your message will lure Kasper back here to sniff our grass and smell the Nicolas coffee pot again!? 🙂 🙂

GraHal

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05/02/2018 at 1:10 PM #69643

Elsborgtrading

@grahal ok you got me 🙂 I did some trading again on demo accounts on MT4 using some of the hamonic pattern indicators. I traded manual, so no backtest is available. I still believe in the power of these patterns, however I lost interest in trading- simply because I lost it all to IG. yes yes I know- every successful trader must lose 90% of his money before being profitable. I don’t think daytrading is for me, nor Boting with prorealtime, before they at least make multiframe available and volume.. etc, etc… There are a reason these things has not been implemented yet. because it not in IG’s favor. IG is not your friend- when you lose money, they win it. simple as that. However studying the harmonic pattern I started to look at crypto in the big FOMO fase in dec-jan. not the best entry time overall for any crypto. (note: I have never seen such a clear FUD and propaganda scam before. all year every media and was leading up to this moment, and the big fish dropped everything on the little people. it was so clear) So I waited, because I could also see through harmonics that it was about to crash. So I waited and planned my trades- I’ve made 7 long trades since January 17th and are atm up 15-25% depending on the day. I also did some more buy&hold for my pension fond doing my strategy from a former post it up 10% last year. So finally I’m profitable. here is the forecast I made on XRP 5th jan- and waited

Regards Kasper

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GraHal

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