In this post, we’ll go through a DOJI Candlestick Pattern Identifier Amibroker AFL Code. The AFL code can be downloaded free of cost and imported into Amibroker.
DOJI Candlestick Pattern Overview
The Doji candlestick pattern is a popular technical analysis tool used by traders to identify potential trend reversals. It is formed when the opening and closing prices of an asset are very close or exactly the same, resulting in a candlestick with a small or non-existent body.
The Doji pattern indicates indecision in the market and suggests that buyers and sellers are in a state of equilibrium. It is often seen as a sign of potential trend reversal, especially if it occurs after a strong uptrend or downtrend. Traders typically look for confirmation of a Doji pattern through other technical indicators or price action analysis before making trading decisions based on this pattern.
Also Read: Most Powerful Candlestick Patterns You Must Know
DOJI Candlestick Pattern Identifier Amibroker AFL Download
Please download the AFL code from this link. It can be readily imported into Amibroker.
DOJI Candlestick Pattern Identifier Amibroker AFL Screenshot
Check out the screenshot of this AFL below
AFL Explanation
- We begin by defining some variables that we’ll use to calculate the Doji candlestick pattern. These include the size of the upper shadow, lower shadow, and body of the candlestick. The upper shadow is the difference between the high of the candlestick and the maximum of the opening or closing price. The lower shadow is the difference between the minimum of the opening or closing price and the low of the candlestick. The body is simply the absolute difference between the opening and closing price.
- We then calculate the threshold for what constitutes a Doji candlestick. We use the average true range (ATR) over the last 14 periods, multiplied by 0.3. This gives us a threshold value that is 30% of the current ATR. If the size of the body of the candlestick is less than this threshold, we consider it to be a Doji candlestick.
- Finally, we identify the Doji candlestick pattern by checking whether the upper and lower shadows are both less than 10% of the body size, and whether the body size is less than the threshold we calculated earlier. If all of these conditions are met, we consider it to be a Doji candlestick pattern. We then plot a small green circle at the high of the candlestick, offset by -10 (so it doesn’t overlap with the candlestick itself) if it is a Doji pattern.
Note that this is just one possible implementation of a Doji candlestick pattern identifier, and there are many other ways to approach the problem. This code is intended as an example only, and should not be taken as a complete or definitive solution.
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