Cave Strategy
Description: This is an indicator based on morning star and evening star pattern recognition, a known technical analysis pattern. I've built on top of the original script shared by @RomanLosev and extended it into a more refined trading strategy called Caves by a trader known only as Farid. The cave long and short indicators represent buy and sell signals based on the 20 EMA trendline.
Morning Star candlestick pattern
The Morning Star candlestick pattern is a reversal pattern in technical analysis. The pattern has three candles. It forms at the bottom of a downtrend. The first candle is any long and bearish candle. The second candle is a small and indecisive candlestick. The third candle is any long and bullish candle. “Bullish” means the stock price closes above the open price. “Bearish” means the stock price closes below the open price.
During a downtrend, high pessimism causes heavy selling. The pattern’s first candle forms. It’s long and bearish. The indecision between the buyers and sellers forms the second candle. It’s a small candlestick—or a Doji. The expectation of positive stock news in the market forms the third candle. It’s long and bullish. When the volume and stock price increases, it suggests a change in trend.
Evening Star candlestick pattern
The Evening Star candlestick pattern is also a reversal pattern. The pattern has three candles. It forms at the top of an uptrend. The first candle is any long and bullish candle. The second candle is a small and indecisive candlestick. The third candle is any long and bearish candle.
During an uptrend, high optimism causes heavy buying. The first candle forms. It’s long and bullish. The indecision between the buyers and sellers forms the second candle. It’s a small candlestick—or a Doji. The expectation of negative stock news in the market forms the third candle. It’s long and bearish. When the volume increases and the price decreases, it suggests a change in trend.
These patterns are used for trend identification. The Morning Star pattern is used as a buy signal. The Evening Star is used as a sell signal. It’s advisable to use a combination of patterns and indicators to determine your trading strategy.
Legend
-- ⬆️ is a U-shaped cave, morning star, visualizing a buy/long signal
-- ⬇️ is an A-shaped cave, evening star, visualizing a sell/short signal
Features
-- ability to change ema
-- style changes
-- emoji
Morning Star candlestick pattern
The Morning Star candlestick pattern is a reversal pattern in technical analysis. The pattern has three candles. It forms at the bottom of a downtrend. The first candle is any long and bearish candle. The second candle is a small and indecisive candlestick. The third candle is any long and bullish candle. “Bullish” means the stock price closes above the open price. “Bearish” means the stock price closes below the open price.
During a downtrend, high pessimism causes heavy selling. The pattern’s first candle forms. It’s long and bearish. The indecision between the buyers and sellers forms the second candle. It’s a small candlestick—or a Doji. The expectation of positive stock news in the market forms the third candle. It’s long and bullish. When the volume and stock price increases, it suggests a change in trend.
Evening Star candlestick pattern
The Evening Star candlestick pattern is also a reversal pattern. The pattern has three candles. It forms at the top of an uptrend. The first candle is any long and bullish candle. The second candle is a small and indecisive candlestick. The third candle is any long and bearish candle.
During an uptrend, high optimism causes heavy buying. The first candle forms. It’s long and bullish. The indecision between the buyers and sellers forms the second candle. It’s a small candlestick—or a Doji. The expectation of negative stock news in the market forms the third candle. It’s long and bearish. When the volume increases and the price decreases, it suggests a change in trend.
These patterns are used for trend identification. The Morning Star pattern is used as a buy signal. The Evening Star is used as a sell signal. It’s advisable to use a combination of patterns and indicators to determine your trading strategy.
Legend
-- ⬆️ is a U-shaped cave, morning star, visualizing a buy/long signal
-- ⬇️ is an A-shaped cave, evening star, visualizing a sell/short signal
Features
-- ability to change ema
-- style changes
-- emoji
Release Notes:
Changes
-- update default EMA to 5
-- change conditions on cave morning and evening stars
-- update default EMA to 5
-- change conditions on cave morning and evening stars
Release Notes:
Updates
-- add high and lows of day
-- white line is high of day
-- red line is low of day
-- add high and lows of day
-- white line is high of day
-- red line is low of day