W/M Pattern Strategy + MACD/RSI Confirmation V3.0 by Thaungkmitl

W/M Pattern Strategy + MACD/RSI Confirmation V3.0

Description Text:
This script is a comprehensive Strategy (backtestable) that combines classical Chart Patterns with momentum indicators to identify high-probability reversal setups. It focuses on detecting "W" Patterns (Double Bottoms/Higher Lows) and "M" Patterns (Double Tops/Lower Highs), filtered by MACD and RSI to reduce false signals.

How It Works
The strategy relies on a "Confluence" of three factors before triggering an entry:

1. Price Action Patterns (W & M)
W Pattern (Bullish): The script detects Pivot Lows. If a new Pivot Low is higher than the previous one (forming a Higher Low structure), it marks a potential "W" pattern.

M Pattern (Bearish): The script detects Pivot Highs. If a new Pivot High is lower than the previous one (forming a Lower High structure), it marks a potential "M" pattern.

2. MACD Confirmation (Zero Line)
Price action alone is not enough. The script waits for the MACD Line to cross the Zero Line:

Buy: MACD crosses UP over 0 (indicating bullish momentum shift).

Sell: MACD crosses DOWN under 0 (indicating bearish momentum shift).

3. RSI Threshold
To ensure the trend has strength, the RSI (Relative Strength Index) acts as a final filter:

Buy Condition: RSI must be above 50.

Sell Condition: RSI must be below 50.

Visual Features
Pivot Labels: Automatically marks Pivot High (Red Triangle) and Pivot Low (Green Triangle).

Pattern Lines: Draws lines connecting the swing points when a potential W or M pattern is detected.

Signals: Displays "BUY" or "SELL" labels with text explaining the setup (e.g., "W+MACD+RSI").

Background: Highlights the chart background (Green/Red) when a valid trade signal occurs.

EMAs: Plots EMA 10 (Blue) and EMA 15 (Red) to help you visualize the immediate trend direction.

Settings
Pivot Left/Right Bars: Adjust the sensitivity of the Swing detection.

MACD Settings: Fast, Slow, and Signal lengths (Standard 12, 26, 9).

RSI Settings: Adjust Length and the Threshold level (Default is 50).

Backtesting
This is a strategy script, meaning you can use the Strategy Tester panel below the chart to see how this logic performs on historical data for your chosen timeframe and asset.

Disclaimer: This tool is for educational purposes. Past performance in backtesting does not guarantee future results.