PinBar and Bloom Pattern Concept (Zeiierman)

5 Jan 2024

█ Overview
The Precision PinBar and Bloom Pattern Concept by Zeiierman introduces two new patterns, which we call the Bloom Pattern and the Precision PinBar Pattern. These patterns are used in conjunction with market open, high, and low values from different periods and timeframes. Together, they form the basis of the "PinBar and Bloom Pattern Concept." The main idea is to identify key bullish and bearish candlestick patterns around key levels plotted on the chart.



The key levels are the Open, High, and Low from the current and previous periods of the selected timeframe. Users can choose how many previous periods to be drawn on the chart.




█ How It Works
The indicator operates by analyzing market data over selected timeframes. It uses inputs such as previous period open-high-low lines, timeframe selections, and pattern detection settings like Symmetry Precision and Range Threshold. These parameters allow the indicator to identify specific market conditions, including symmetrical movements in price and significant price range deviations, which form the basis of the Bloom and Precision PinBar patterns.

Symmetry Signal:

• Purpose: To detect symmetry in price movements based on a precision threshold.
  
• How It Works: This function calculates the symmetry of high and low prices within the specified precision. It returns two boolean values indicating whether the high and low prices are within the symmetry precision.
  

BaselineBound Pattern:

• Purpose: To identify bullish or bearish patterns based on a range factor.
  
• How It Works: The function calculates whether the current close price is within a certain range of the high-low difference of the previous period. It returns bullish and bearish signals based on these calculations.
  

█ ● Bloom Pattern
The Bloom Pattern is a unique candlestick pattern designed to identify significant trend reversals or continuations. It's not a single candlestick formation but a combination of a few elements that signal a potential strong move in the market.

⚪ Previous and Current Candle Analysis: The Bloom Pattern looks at the relationship between the current candle and the previous one. It checks whether the current candle's body (the range between its opening and closing prices) fully encompasses the body of the previous candle. This condition is known as "embodying."

⚪ Baseline Bound: The Baseline Bound concept involves comparing the closing price to a range established by the high and low of the previous candle, adjusted by a factor (the rangeFactor). This helps in identifying if the current price is showing a bullish or bearish tendency relative to the previous period's price movement.

⚪ Symmetry Signal: Additionally, it uses the Symmetry Signal, which measures the symmetry between the high and low prices of two consecutive candles.

⚪ Bullish and Bearish Signals: The combination of these conditions (embodying, baseline bound, and symmetry) results in either a bullish or bearish signal. A bullish signal suggests a potential upward trend, while a bearish signal indicates a possible downward trend.





█ ● Precision PinBar Pattern
The Precision PinBar Pattern is a refined version of the traditional Pin Bar, a well-known candlestick pattern used in trading. This pattern focuses on identifying market reversals with a high degree of accuracy.

⚪ Identification of Pin Bars: The function first identifies a pin bar, characterized by a small body and a long wick. The long wick indicates a rejection of certain price levels, and the small body shows little change between the opening and closing prices.

⚪ Tail and Body Length Analysis: The script calculates the length of the bar's tail (wick) and compares it to the length of the body. A qualifying pin bar typically has a tail at least three times longer than its body, suggesting a strong rejection of prices.

⚪ Positioning and Thresholds:
Open-Close Position: The function checks whether the opening and closing prices are within a certain threshold of the high or low of the bar, which helps in distinguishing between bullish and bearish pin bars.

⚪ Baseline Bound and Symmetry: Like the Bloom Pattern, it incorporates Baseline Bound and Symmetry Signal concepts to validate the significance of the pin bar.

⚪ Bullish and Bearish Signals: Depending on these factors, a bullish or bearish pin bar is identified. A bullish PinBar suggests potential upward price movement, while a bearish PinBar indicates possible downward price movement.




█ How to Use
Using the Bloom and Precision PinBar patterns in conjunction with key market levels, such as previous highs and lows, can be a powerful strategy for traders. These market levels often act as significant points of support and resistance, and combining them with the patterns can offer strong trade signals. Here's how traders can effectively utilize these patterns:

Identifying Key Market Levels
Previous Highs and Lows: These are the highest and lowest points reached in previous trading periods and are often considered strong levels of resistance (in the case of previous highs) and support (in the case of previous lows).

Using the Bloom Pattern

Near Previous Highs (Resistance): If a Bloom Pattern emerges near a previous high, it could indicate a potential bearish reversal. Traders might interpret this as a signal to consider short positions, especially if the pattern shows bearish characteristics.

Near Previous Lows (Support): Conversely, a bullish Bloom Pattern near a previous low could suggest a trend reversal to the upside. This could be a signal for traders to consider long positions.

Using the Precision PinBar Pattern

Precision PinBar at Resistance: A bearish Precision PinBar appearing near a previous high can be a strong signal for a potential downward move. This setup is often used by traders to enter short positions, anticipating a price rejection at this resistance level.

Precision PinBar at Support: Similarly, a bullish Precision PinBar at or near a previous low suggests that the market is rejecting lower prices, indicating potential upward momentum. This is typically used by traders as a cue to go long.

█ Settings

• Previous Open-High-Low Lines: Determine the number of historical periods to analyze. Settings include toggling the visibility of lines and labels and specifying the number of periods.
  
• Timeframe & Current Period: Select the timeframe for current market analysis. Options include different timeframes (e.g., 1H, 1D) and customization of line styles and colors.
  
• Pattern Settings: Adjust the Symmetry Precision and Range Threshold to fine-tune the indicator's sensitivity to specific market movements.
  
• Bloom & Precision PinBar Pattern: Enable or disable the detection of specific patterns and customize the visual representation of these patterns on the chart.
  

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Disclaimer

The information contained in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.

My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!

9 Jan 2024

Nota Keluaran

Minor improvements and alerts have been added

31 Jan 2024

Nota Keluaran

Minor fix

11 Sep 2024

Nota Keluaran

Minor fixes