The Tasuki Pattern Recognition in TradingView
Coding a Tasuki Candlestick Pattern Scanner in TradingView
Candlestick patterns are a great addition to market analysis. Some may even consider them vital in research and trading. This article presents the Tasuki 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 Tasuki 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 Tasuki pattern is a continuation pattern that occurs when the market gaps and pulls-back to a certain extent.
The bullish Tasuki is composed of a bullish candlestick that gaps up from a previous bullish candlestick and then is followed by a bearish candlestick that closes above the close of the first candle but below the close of the second candle. The following Figure shows a theoretical illustration of the bullish Tasuki.
The bearish Tasuki is composed of a bearish candlestick that gaps down from a previous bearish candlestick and then is followed by a bullish candlestick that closes below the close of the first candle but above the close of the second candle. The following Figure shows a theoretical illustration of the bearish Tasuki.
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 Tasuki patterns using the following indications:
A green arrow for the Tasuki signals.
A red arrow for the Tasuki 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("Candlestick Pattern - Tasuki", overlay = true)
bullish_tasuki = close < open and close[1] > open[1] and close[2] > open[2] and close < open[1] and close > close[2] and open[1] > close[2]
bearish_tasuki = close > open and close[1] < open[1] and close[2] < open[2] and close > open[1] and close < close[2] and open[1] < close[2]
plotshape(bullish_tasuki, style = shape.triangleup, color = color.green, location = location.belowbar, size = size.small)
plotshape(bearish_tasuki, 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.