The Double Trouble Pattern Recognition in TradingView

Coding a Double Trouble Candlestick Pattern Scanner in TradingView

Sofien Kaabar, CFA

Feb 12, 2023

Candlestick patterns are a great addition to market analysis. Some may even consider them vital in research and trading. This article presents the Double Trouble pattern and shows how to code a scanner in TradingView that detects it.

For the complete collection of candlestick patterns in detail with back-tests and technical strategies, you can check out my newest book with O’Reilly Media. The book features a huge number of classic and modern candlestick patterns as it dwelves into the realm of technical analysis with different trading strategies. The book comes with its own GitHub and is dynamic in nature as it is continuously updated and questions are answered on the O’Reilly platform promptly.

Mastering Financial Pattern Recognition
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The Double Trouble Pattern

Candlestick charts are among the most famous ways to analyze the time series visually. They contain more information than a simple line chart and have more visual interpretability than bar charts.

The Double Trouble pattern is a two-candlestick trend following configuration. The general shape is a candlestick relatively bigger than the previous one. The size metric is measured using a volatility metric called the average true range (ATR).

The bullish Double Trouble is composed of a bullish candlestick with a body range greater than the 10-period ATR of the previous bullish candlestick. The following Figure shows a theoretical illustration of the bullish Double Trouble.

The bearish Double Trouble is composed of a bearish candlestick with a body range greater than the 10-period ATR of the previous bearish candlestick. The following Figure shows a theoretical illustration of the bearish Double Trouble.

Coding the Scanner in TradingView

The conditions of the pattern are relatively easy to code especially in a straightforward and simple coding language such as Pine Script, TradingView’s native language.

The aim of the scanner is to detect the Double Trouble patterns using the following indications:

A green arrow for bullish Double Trouble signals.
A red arrow for bearish Double Trouble signals.

// This source code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © Sofien-Kaabar

//@version=5
indicator("Double Trouble Finder", overlay = true)

atr = ta.atr(10)

bullish_double_trouble = close > open and close[1] > open[1] and close > close[1] and (close - open) > (2 * atr[1])
bearish_double_trouble = close < open and close[1] < open[1] and close < close[1] and (open - close) > (2 * atr[1])

plotshape(bullish_double_trouble,  style = shape.triangleup,   color = color.green,  location =  location.belowbar, size = size.small)
plotshape(bearish_double_trouble,  style = shape.triangledown, color = color.red,    location =  location.abovebar, size = size.small)

The following Figure shows a signal chart after the code has been applied and executed.

The following Figure shows another signal chart.

Summary

To sum up, what I am trying to do is to simply contribute to the world of objective technical analysis which is promoting more transparent techniques and strategies that need to be back-tested before being implemented. This way, technical analysis will get rid of the bad reputation of being subjective and scientifically unfounded.

I recommend you always follow the the below steps whenever you come across a trading technique or strategy:

Have a critical mindset and get rid of any emotions.
Back-test it using real life simulation and conditions.
If you find potential, try optimizing it and running a forward test.
Always include transaction costs and any slippage simulation in your tests.
Always include risk management and position sizing in your tests.

Finally, even after making sure of the above, stay careful and monitor the strategy because market dynamics may shift and make the strategy unprofitable.