PATTERN RECOGNITION Trading Guide

The Pattern Recognition Signals indicator is a sophisticated geometrical tool designed to automatically identify Double Top/Bottom and Triple Top/Bottom formations based on swing pivot points. It maps these structures on the chart and projects intelligent Take Profit (TP) and Stop Loss (SL) zones.

What does the indicator show?

• Pivot Dots: Small markers (red for high, green for low) indicating confirmed swing points used to build the patterns.
• Zigzag Lines: Colored lines connecting the structural price swings to visually trace the W-shaped Double Bottoms or M-shaped Double Tops as they form.
• TP / SL Target Boxes: Semi-transparent shaded zones projected forward in time representing mathematical Take Profit 1, Take Profit 2, and Stop Loss levels based on Average Daily Range (ADR).
• Statistics Dashboard: A floating panel showing live backtest statistics including win rates and the historical performance of the last 10 detected patterns.

Key Settings

• Pivot Length & Constraints: Control how strict the indicator is when validating peaks and valleys (e.g., Min/Max Pattern Bars, Max Wave Size Ratio).
• ADR Percentages for Targets: Define exactly at what percentage of the Average Daily Range your TP1, TP2, and Stop Loss levels should be placed.
• Visibility Toggles: Enable or disable the drawing of Double Patterns, Triple Patterns, Pivot Dots, and change the extension length of the target boxes.

How to use Strategy Parameters (Condition Source)

Within the Strategy Tester module, you can leverage the discrete signals generated by this indicator to automate setups.

1. Pattern Breakout Signals

Fires exactly when a confirmed pattern completes its geometry.

• buySignal — Triggers when a valid Bullish Double Bottom or Triple Bottom is mathematically confirmed.
• sellSignal — Triggers when a valid Bearish Double Top or Triple Top is confirmed.

Strategy Example: If you are building an automated reversal bot, you can set an entry condition requiring buySignal is true to catch bottoms mapped by the algorithm.

2. Risk Management Math

Volatility metric variables.

• adrSafe — The 10-period Average Daily Range computed dynamically by the indicator and used to size the TP/SL boxes. You can use it as a volatility filter for other conditions.