3 Candle Formation Trading Strategy

pinescript.pine

//@version=5
indicator("3-Candle Pattern with Horizontal Rectangle Box", overlay=true)

// === Pattern Detection ===
isValidBullishPattern() =>
    close[2] > open[2] and close[1] > open[1] and close > open and low[1] > low[2] and low > low[1]

isValidBearishPattern() =>
    close[2] < open[2] and close[1] < open[1] and close < open and high[1] < high[2] and high < high[1]

// === State Variables ===
var box bullBox = na
var box bearBox = na
var int bullStartBar = na
var int bearStartBar = na

// === Detect Patterns ===
bullishPattern = isValidBullishPattern()
bearishPattern = isValidBearishPattern()

// === Start Bullish Rectangle Box ===
if bullishPattern
    if not na(bearBox)
        box.set_right(bearBox, bar_index)
        bearBox := na
        bearStartBar := na
    if na(bullBox)
        bullStartBar := bar_index[2]
        bullBox := box.new(bullStartBar, close[2], bar_index, low[2], border_color=color.green, bgcolor=color.new(color.green, 85))

// === Extend Bullish Box ===
if not na(bullBox) and not bullishPattern
    box.set_right(bullBox, bar_index)

// === Start Bearish Rectangle Box ===
if bearishPattern
    if not na(bullBox)
        box.set_right(bullBox, bar_index)
        bullBox := na
        bullStartBar := na
    if na(bearBox)
        bearStartBar := bar_index[2]
        bearBox := box.new(bearStartBar, high[2], bar_index, close[2], border_color=color.red, bgcolor=color.new(color.red, 85))

// === Extend Bearish Box ===
if not na(bearBox) and not bearishPattern
    box.set_right(bearBox, bar_index)