The "Patterns2" strategy is a backtesting strategy that incorporates various technical analysis (TA) indicators and candlestick patterns to generate buy and sell signals. Here's a breakdown of what the strategy does:
populate_indicators: This function adds several TA indicators to the given DataFrame. The indicators used in this strategy are:
MFI (Money Flow Index)
RSI (Relative Strength Index)
Bollinger Bands (upper and lower bands, with standard deviation of 2)
SMA (Simple Moving Average)
Various candlestick patterns (e.g., HAMMER, INVERTED HAMMER, DRAGONFLY DOJI, etc.)
populate_entry_trend: This function populates the buy signal based on the TA indicators and candlestick patterns.
It applies specific conditions for each indicator or pattern enabled in the strategy.
The conditions used in this strategy are:
RSI value below a certain threshold
Close price below the SMA
MFI value below a certain threshold
Bollinger Bands gain (difference between upper band and close price) above a certain threshold
Candlestick patterns (e.g., 3 WHITE SOLDIERS, MORNING STAR, 3 LINE STRIKE, etc.) with strength above a certain threshold
populate_exit_trend: This function populates the sell signal for the given DataFrame.
It doesn't use any TA indicators or conditions but sets the "sell" column to 0 for all non-null close prices. Overall, the strategy aims to identify potential buying opportunities based on the combination of TA indicators and candlestick patterns, while the exit points are determined separately without any specific conditions.