Hammers & Stars Strategy





This script trades basic hammer and shooting star candlestick patterns.

It’s an extremely simple strategy with minimal filters, and according to my personal manual backtesting and automated trading results, performs best on the Daily chart on certain forex pairs.

It is intended to be traded on the forex markets but theoretically should work on all markets (especially if you optimize the settings).

The script also comes with complete AutoView automation for Oanda.

How It Works

According to the default settings, the script defines a hammer candle as a candle which closes in the upper 33% of the entire bar, and does not close equal to its open (ie. is not a doji).

The same is true for shooting star candles – the candle must close in the lower third of the entire bar including the top and bottom wick in order to be considered valid.

This strategy is based on the definitions provided by Investopedia, and was inspired by a YouTube video created by my trading mentor Steven Hart.

Settings


Strategy Settings:

>= ATR Filter:
Minimum size of entry candle compared to ATR

<= ATR Filter:
Maximum size of entry candle compared to ATR

Stop Loss ATR:
Stop loss multiplier (x ATR)

R:R:
Risk:Reward profile

Fib Level:
Used to calculate upper/lower third of candle. (For example, setting it to 0.5 will mean hammers must close >= 50% mark of the total candle size)

Start Date Filter:
Date & time to begin trading from

End Date Filter:
Date & time to stop trading

AutoView Oanda Settings:

Use Oanda Demo:
If turned on then oandapractice broker prefix will be used for AutoView alerts (demo account). If turned off then live account will be used

Use Limit Order:
If turned on then AutoView will use limit orders. If turned off then market orders will be used (recommended to use limit order to mitigate spread issues)

Days To Leave Limit Order:
This is your GTD setting (good til day)

Account Balance:
Your account balance (used for calculating position size)

Account Currency:
Your account balance currency (used for calculating position size)

Risk Per Trade %:
Your risk per trade as a % of your account balance


Pine Script Basics Course
 

Source Code

// This source code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © ZenAndTheArtOfTrading / www.PineScriptMastery.com
// Last Updated: 28th April, 2021
// @version=4
strategy("Hammers & Stars Strategy [v1.0]", shorttitle="HSS[v1.0]", overlay=true)

// Get user input
atrMinFilterSize = input(title=">= ATR Filter", type=input.float, defval=0.0, minval=0.0, tooltip="Minimum size of entry candle compared to ATR", group="Strategy Settings")
atrMaxFilterSize = input(title="<= ATR Filter", type=input.float, defval=3.0, minval=0.0, tooltip="Maximum size of entry candle compared to ATR", group="Strategy Settings")
stopMultiplier   = input(title="Stop Loss ATR", type=input.float, defval=1.0, tooltip="Stop loss multiplier (x ATR)", group="Strategy Settings")
rr               = input(title="R:R", type=input.float, defval=1.0, tooltip="Risk:Reward profile", group="Strategy Settings")
fibLevel         = input(title="Fib Level", type=input.float, defval=0.333, tooltip="Used to calculate upper/lower third of candle. (For example, setting it to 0.5 will mean hammers must close >= 50% mark of the total candle size)", group="Strategy Settings")
i_startTime      = input(title="Start Date Filter", defval=timestamp("01 Jan 2000 13:30 +0000"), type=input.time, tooltip="Date & time to begin trading from", group="Strategy Settings")
i_endTime        = input(title="End Date Filter", defval=timestamp("1 Jan 2099 19:30 +0000"), type=input.time, tooltip="Date & time to stop trading", group="Strategy Settings")
oandaDemo        = input(title="Use Oanda Demo?", type=input.bool, defval=false, tooltip="If turned on then oandapractice broker prefix will be used for AutoView alerts (demo account). If turned off then live account will be used", group="AutoView Oanda Settings")
limitOrder       = input(title="Use Limit Order?", type=input.bool, defval=true, tooltip="If turned on then AutoView will use limit orders. If turned off then market orders will be used", group="AutoView Oanda Settings")
gtdOrder         = input(title="Days To Leave Limit Order", type=input.integer, minval=0, defval=2, tooltip="This is your GTD setting (good til day)", group="AutoView Oanda Settings")
accountBalance   = input(title="Account Balance", type=input.float, defval=1000.0, step=100, tooltip="Your account balance (used for calculating position size)", group="AutoView Oanda Settings")
accountCurrency  = input(title="Account Currency", type=input.string, defval="USD", options=["AUD", "CAD", "CHF", "EUR", "GBP", "JPY", "NZD", "USD"], tooltip="Your account balance currency (used for calculating position size)", group="AutoView Oanda Settings")
riskPerTrade     = input(title="Risk Per Trade %", type=input.float, defval=2.0, step=0.5, tooltip="Your risk per trade as a % of your account balance", group="AutoView Oanda Settings")

// Set up AutoView broker prefix
var broker = oandaDemo ? "oandapractice" : "oanda"

// See if this bar's time happened within date filter
dateFilter = time >= i_startTime and time <= i_endTime

// Get ATR
atr = atr(14)

// Check ATR filter
atrMinFilter = abs(high - low) >= (atrMinFilterSize * atr) or atrMinFilterSize == 0.0
atrMaxFilter = abs(high - low) <= (atrMaxFilterSize * atr) or atrMaxFilterSize == 0.0
atrFilter = atrMinFilter and atrMaxFilter

// Calculate 33.3% fibonacci level for current candle
bullFib = (low - high) * fibLevel + high
bearFib = (high - low) * fibLevel + low

// Determine which price source closes or opens highest/lowest
lowestBody = close < open ? close : open
highestBody = close > open ? close : open

// Determine if we have a valid setup
validHammer = lowestBody >= bullFib and atrFilter and close != open and not na(atr)
validStar = highestBody <= bearFib and atrFilter and close != open and not na(atr)

// Check if we have confirmation for our setup
validLong = validHammer and strategy.position_size == 0 and dateFilter and barstate.isconfirmed
validShort = validStar and strategy.position_size == 0 and dateFilter and barstate.isconfirmed

//------------- DETERMINE POSITION SIZE -------------//
// Get account inputs
var tradePositionSize = 0.0
var pair = syminfo.basecurrency + "/" + syminfo.currency

// Check if our account currency is the same as the base or quote currency (for risk $ conversion purposes)
accountSameAsCounterCurrency = accountCurrency == syminfo.currency
accountSameAsBaseCurrency = accountCurrency == syminfo.basecurrency

// Check if our account currency is neither the base or quote currency (for risk $ conversion purposes)
accountNeitherCurrency = not accountSameAsCounterCurrency and not accountSameAsBaseCurrency

// Get currency conversion rates if applicable
conversionCurrencyPair = accountSameAsCounterCurrency ? syminfo.tickerid : accountNeitherCurrency ? accountCurrency + syminfo.currency : accountCurrency + syminfo.currency
conversionCurrencyRate = security(symbol=syminfo.type == "forex" ? conversionCurrencyPair : "AUDUSD", resolution="D", expression=close)

// Calculate position size
getPositionSize(stopLossSizePoints) =>
    riskAmount = (accountBalance * (riskPerTrade / 100)) * (accountSameAsBaseCurrency or accountNeitherCurrency ? conversionCurrencyRate : 1.0)
    riskPerPoint = (stopLossSizePoints * syminfo.pointvalue)
    positionSize = (riskAmount / riskPerPoint) / syminfo.mintick
    round(positionSize)
    
// Custom function to convert pips into whole numbers
toWhole(number) =>
    return = atr(14) < 1.0 ? (number / syminfo.mintick) / (10 / syminfo.pointvalue) : number
    return := atr(14) >= 1.0 and atr(14) < 100.0 and syminfo.currency == "JPY" ? return * 100 : return
//------------- END POSITION SIZE CODE -------------//

// Calculate our stop distance & size for the current bar
stopSize = atr * stopMultiplier
longStopPrice = low < low[1] ? low - stopSize : low[1] - stopSize
longStopDistance = close - longStopPrice
longTargetPrice = close + (longStopDistance * rr)
shortStopPrice = high > high[1] ? high + stopSize : high[1] + stopSize
shortStopDistance = shortStopPrice - close
shortTargetPrice = close - (shortStopDistance * rr)

// Save trade stop & target & position size if a valid setup is detected
var tradeStopPrice = 0.0
var tradeTargetPrice = 0.0

// Set up our GTD (good-til-day) order info
gtdTime = time + (gtdOrder * 1440 * 60 * 1000) // 86,400,000ms per day
gtdYear = year(gtdTime)
gtdMonth = month(gtdTime)
gtdDay = dayofmonth(gtdTime)
gtdString = " dt=" + tostring(gtdYear) + "-" + tostring(gtdMonth) + "-" + tostring(gtdDay)

// Detect valid long setups & trigger alert
if validLong
    tradeStopPrice := longStopPrice
    tradeTargetPrice := longTargetPrice
    tradePositionSize := getPositionSize(toWhole(longStopDistance) * 10)
    // Trigger AutoView long alert
    alert(message="e=" + broker + " b=long q="
     + tostring(tradePositionSize) 
     + " s=" + pair
     + " t=" + (limitOrder ? "limit fp=" + tostring(close) : "market")
     + " fsl=" + tostring(tradeStopPrice)
     + " ftp=" + tostring(tradeTargetPrice)
     + (gtdOrder != 0 and limitOrder ? gtdString : ""), 
     freq=alert.freq_once_per_bar_close)
   
// Detect valid short setups & trigger alert
if validShort
    tradeStopPrice := shortStopPrice
    tradeTargetPrice := shortTargetPrice
    tradePositionSize := getPositionSize(toWhole(shortStopDistance) * 10)
    // Trigger AutoView short alert
    alert(message="e=" + broker + " b=short q="
     + tostring(tradePositionSize)
     + " s=" + pair
     + " t=" + (limitOrder ? "limit fp=" + tostring(close) : "market")
     + " fsl=" + tostring(tradeStopPrice)
     + " ftp=" + tostring(tradeTargetPrice)
     + (gtdOrder != 0 and limitOrder ? gtdString : ""),
     freq=alert.freq_once_per_bar_close)

// Enter trades whenever a valid setup is detected
strategy.entry(id="Long", long=strategy.long, when=validLong)
strategy.entry(id="Short", long=strategy.short, when=validShort)

// Exit trades whenever our stop or target is hit
strategy.exit(id="Long Exit", from_entry="Long", limit=tradeTargetPrice, stop=tradeStopPrice, when=strategy.position_size > 0)
strategy.exit(id="Short Exit", from_entry="Short", limit=tradeTargetPrice, stop=tradeStopPrice, when=strategy.position_size < 0)

// Draw trade data
plot(strategy.position_size != 0 or validLong or validShort ? tradeStopPrice : na, title="Trade Stop Price", color=color.red, style=plot.style_linebr, transp=0)
plot(strategy.position_size != 0 or validLong or validShort ? tradeTargetPrice : na, title="Trade Target Price", color=color.green, style=plot.style_linebr, transp=0)
plot(strategy.position_size != 0 or validLong or validShort ? tradePositionSize : na, color=color.purple, transp=100, title="AutoView Position Size")

// Draw price action setup arrows
plotshape(validLong ? 1 : na, style=shape.triangleup, location=location.belowbar, color=color.green, title="Bullish Setup")
plotshape(validShort ? 1 : na, style=shape.triangledown, location=location.abovebar, color=color.red, title="Bearish Setup")

Last Updated: 28th April, 2021


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