How To Trade Candles Patterns | Strategy Backtest In Python

In this informative video, we will explore the power of price action patterns in combination with Bollinger Bands for trading strategy backtesting. Specifically, we will delve into the Doji and Engulfing price action patterns, two of the most reliable and effective patterns in technical analysis. Through the use of Python, we will analyze historical market data and test our strategy's performance using various parameters.

Bollinger Bands, a popular technical indicator, provide a visual representation of volatility by displaying the standard deviation of price movement around a moving average. When used in conjunction with price action patterns like the Doji and Engulfing, we can identify key areas of support and resistance and make informed trading decisions.

The Doji pattern occurs when the opening and closing price of an asset are almost identical, creating a small-bodied candlestick. This pattern signals indecision in the market and can provide a potential reversal signal when combined with other indicators like Bollinger Bands.

The Engulfing pattern, on the other hand, occurs when a small candlestick is followed by a larger candlestick that completely engulfs the previous candle. This pattern indicates a strong shift in momentum and can be a signal to enter or exit a trade.

Using Python, we will backtest our trading strategy and evaluate its performance based on metrics like the win rate, profit factor, and maximum drawdown. By testing different parameters, we can optimize our strategy for maximum profitability and minimize risk.

Overall, this video is a must-watch for any trader interested in combining Bollinger Bands with price action patterns like the Doji and Engulfing for a winning trading strategy. With Python, we can automate our analysis and testing process and gain valuable insights into market behavior that can lead to profitable trades.

Good luck and thank you for following!

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You can download the python notebook with the following link:

#trading #algorithmictrading #forex #tradingstrategy #backtesting

[QuantumIdeas]

Thank you very much. Your explanation even makes this code a very useful case study for Python learners. Cheers!

[trolley]

Thanks for explaining the code too! it really helps those of us who are amateur programmers

[hidayatadiprasetiyo]

Thank you for your videos. Very inspiring. If possible, hope you can post a video about a strategy that can be run on a renko chart. If at all possible, hope you can show the steps from downloading the price data, converting the data to a renko chart, & finally run the strategy on that renko chart. Much appreciated.

[tigerpainset]

It the best video thank you for you share. 🙂

[shortfacts-qyke]

Thank you so much if combine it with the fibo retracement percentage 61.8 and 78.6 88.8, 113, 127, 161, 8 it will be helpful and it will achieve the pattern, you give me very good idea because I know harmonic patterns very well

[ah]

Engulfing is stronger when happens after reversing three of more bearish or bullish especially if the previous has pivot point, low or high. This happens a lot in EURUSED. You can also look for double or triple tailed candles especially if it's reversal towards the larger TF trend. Large TF like 1H is less random but in my opinion it's more breakout than reversal.

[ЭльмарИдрисов-гэ]

Great video as usual. Have you switched to Python 3.11? It is said to be faster, but I am not sure how much if is relevant for people like us doing finance/trading stuff.

[ismailsufiani]

kindly waiting for detecting and trading off supply and demand zones using pyhon

[shortfacts-qyke]

We can use fibo retracement % with candles pattern it means if the trend up or down we can use 61, 8 and 78.6 and 88, 6 and if use for selling price 127% and 161 and 200 fibo for sell we can combine moving average 200 as a trend line

[munivoltarc]

Hi, can u please make a video for price action alone in buy and sell with multitime frame with out using any indicator can you do it?

[corneliusluka]

Thanks Sir, can you do a code to read bullish trend HH, HL and Bearish TREND

[gurkanozturk]

I am following you and trying to develop and change myself and also the codes you shared. Other channels I found is not good as you are. Your videos helped me a lot but I am having trouble with automatic trailing stop. will there be a video about it? and also want to add that sometimes your codes causes warnings about dataframe copying because of not using .loc function. will be appreciate if answer

[GuidanceToFulfillment]

Hi. How do i forward test and run this bot on a demo account. I have connected python and logged in to meta trader 5 but i dont know how to code execute trades since this code was made for backtest

[alanpage]

I mimic the code but replaced bollinger_doji_signal with ema_doji_signal.. I wish to use EMA 13 as entry trigger when price closes below or above the EMA. I got an error: 'STRATEGY' not defined. :(

[amjoode]

do you think applying a "majority vote" to multiple strategies would make better or worse?

[sinan_islam]

Can you achieve 60% success rate with candles?

[rmanshk]

bro can you connect algoritms to mt5 not to yahoo finance for real time trading ?

[Exzal]

Thanks. I've finished my own strategy that consisted in liquidity grab. I was really optimistic about the result when backtesting it manually for months... Now with my code I realized that it simply didnt work at all !! It's amazing...
It seems very hard to find a real profitable strategy.
I'll play with more pieces of codes to try something else lol

[kyawthuta]

where can i download backtesting class

[metehan]

Which programm do you use to run the trading bot ?