LBR Three Bar Triangle

June 25th, 2013, 07:52 PM

What would be the logic for LBR 3-Bar Trianagle for coding into Ninja?

I need to confirm the following:

If
High(0) < High(1) and High(0) < High(2) and
Low(0) > Low(1) and Low(0) > Low(2)
Look for Longs;

The reverse would apply for looking for shorts.

Is this the correct logic?

June 25th, 2013, 08:19 PM

aligator

What would be the logic for LBR 3-Bar Trianagle for coding into Ninja?

I need to confirm the following:

If
High(0) < High(1) and High(0) < High(2) and
Low(0) > Low(1) and Low(0) > Low(2)
Look for Longs;

The reverse would apply for looking for shorts.

Is this the correct logic?

This?

https://www.tsindicators.com/Trading_notes/3_Bar_Triangles.html

While it's not proper Ninjascript syntax it logically looks correct.

It seems this condition doesn't specify when to look for longs, rather, to look for breakouts out of this 3-day range when the ADX(14) < 18.

This reminds me of some of these 3-bar patterns (see attachment)

June 25th, 2013, 08:30 PM

shodson

This?

While it's not proper Ninjascript syntax it logically looks correct.

It seems this condition doesn't specify when to look for longs, rather, to look for breakouts out of this 3-day range when the ADX(14) < 18.

Thanks @shodson,

Yes, I understand about proper syntax, I just wanted to write the logic down. Also, I have been to that link before and that is where I got the information. However, the information in that link does not specify conditions for breakout to up and down separately, just a generic description which seemed to me it is only for breakouts to the upside.

This is why I need confirmation for the logic, both up and down breakout triangles.

Thanks.

June 25th, 2013, 09:15 PM

shodson

This?

https://www.tsindicators.com/Trading_notes/3_Bar_Triangles.html

While it's not proper Ninjascript syntax it logically looks correct.

It seems this condition doesn't specify when to look for longs, rather, to look for breakouts out of this 3-day range when the ADX(14) < 18.

I had a look at the link above. The definition for a triangle reads a high lower than the preceding 2-bar high and a low higher than the preceding 2-bar low.

In my opinion the coding logic would be different:

Code

IF ((High[0] < High[1] OR High[0] < High[2]) AND (Low[0] > Low[1] OR Low[0] > Low[2]))

It is not required that High[0] is smaller than both of the two preceding highs and that Low[0] is larger than both of the two preceding lows.

June 25th, 2013, 09:51 PM

Fat Tails

I had a look at the link above. The definition for a triangle reads a high lower than the preceding 2-bar high and a low higher than the preceding 2-bar low.

In my opinion the coding logic would be different:

Code

IF ((High[0] < High[1] OR High[0] < High[2]) AND (Low[0] > Low[1] OR Low[0] > Low[2]))

It is not required that High[0] is smaller than both of the two preceding highs and that Low[0] is larger than both of the two preceding lows.

if I may add my logic as well

lets use an example:

High[1] = 7
High[2] = 4

now that means the preceding 2-bar high is 7. so if High[0] = (between 1 and 6) it's valid. meaning if High[0] = 5, then i'ts still lower than the preceding 2-bar high, but higher than High[2].

therefore @Fat Tails is absolutely correct imho

June 25th, 2013, 11:27 PM

What was the definition Linda gave during the last webinar?

Mike

June 25th, 2013, 11:43 PM

Here is the definition from the above link.

"3 Bar Triangles are bars when the high is lower than the 2 day high and the low is higher than the 2 day low. Have a
higher percentage of follow through than simple NR7 or 1 bar type of patterns. "

Not sure the H(0) being lower than the HH(2) and L(0) higher than LL(2) would form a triangle for some situations. That is why I wanted to confirm the logic.

June 25th, 2013, 11:51 PM

@aligator,
Are you speaking of the Crabel price patterns such as those found here on mypivots?
E-mini S&P500 September 2013

Ken

aligator

Here is the definition from the above link.
"3 Bar Triangles are bars when the high is lower than the 2 day high and the low is higher than the 2 day low. Have a
higher percentage of follow through than simple NR7 or 1 bar type of patterns. "

Not sure the H(0) being lower than the HH(2) and L(0) higher than LL(2) would form a triangle for some situations. That is why I wanted to confirm the logic.

June 25th, 2013, 11:58 PM

COTtrader

@aligator,
Are you speaking of the Crabel price patterns such as those found here on mypivots?
E-mini S&P500 September 2013

Ken

No, this pattern was discussed by Linda R. during yesterday's futures.io (formerly BMT) webinar. I do not know the origin of this 3-Bar Triangle pattern.

But my impression was that something like a double inside bar would make a triangle. However, the above definition would not necessarily produce a triangle some times. That is why I was asking for clarification.

June 26th, 2013, 10:20 AM

Big Mike

What was the definition Linda gave during the last webinar?

Mike

I did not find an explicit definition, but the recorded webinar shows two three bar triangle patterns (go to minute 51:00).

The pattern shown on the chart match the definition from the link https://www.tsindicators.com/Trading_notes/3_Bar_Triangles.html posted by @shodson, and are in line with the code logic that I have posted above. Today's high must be lower than the higher of yesterday's high and the high of the day prior to yesterday. Today's low must be higher than the lower of yesterday's low and the low of the day prior to yesterday.

There are two ways to code this in NinjaTrader

Code

// first option

if(High[0] < Math.Max(High[1], High[2] && Low[0] > Math.Min(Low[1], Low[2])
     triangle = true;

// second option

if((High[0] < High[1] || High[0] < High[2]) && (Low[0] > Low[1] || Low[0] > Low[2]))
     triangle = true;

If you have an inside bar, it is always a three bar triangle pattern. But the reverse is not true, as there are three bar triangle patterns that are not inside bars.

aligator

Here is the definition from the above link.

"3 Bar Triangles are bars when the high is lower than the 2 day high and the low is higher than the 2 day low. Have a
higher percentage of follow through than simple NR7 or 1 bar type of patterns. "

Not sure the H(0) being lower than the HH(2) and L(0) higher than LL(2) would form a triangle for some situations. That is why I wanted to confirm the logic.

I have given the logic above. I think there is one element missing. The pattern is stands for a consolidation of three days which may precede a breakout. I would therefore ask for the third day to have a lower range than the preceding day.

If you look at the patterns that have been suggested by Toby Crabel, they are slightly different:

NR or narrow range day: current range must be smaller than the range of the previous day
NR7 or narrow range 7 days: current range must be smaller than the range of each of the 6 preceding days
WS or wide spread day: current range must be larger than the range of the previous day
WS4 or wide spread 4 day: current range must be larger than the range of each of the 6 preceding days
ID or inside day: current high must be smaller than the high or the previous day, current low must be larger than the low of the previous day
IDNR4 or inside narrow range 4 day: a day which is an inside day and a narrow range 4 day
2BNR or two bar narrow range day: The two-bar range of the last day must be smaller than the two bar range of the prior day

The focus of Toby Crabel is more on declining volatility. The three bar triangle pattern by LBR does not specify whether the last bar should have a smaller range than the two preceding bars. It is even possible to build a three bar triangle pattern, where the last bar has a higher range than the two preceding bars.

However, in practice the patterns are often similar. If I look at the two examples shown on the chart in the webinar, then

-> the first triangle is also an IDNR7 (inside day and narrow range 7 day) pattern
-> the second triangle is a NR3 pattern

LBR Three Bar Triangle

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LBR Three Bar Triangle