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CDLMatchingLow

Incremental, causal technical analysis documentation

Summary

CDLMatchingLow is RTTA's streaming detector for the Matching low candlestick pattern. Two consecutive bearish bars with nearly equal closes (possible support).

Output follows the TA-Lib convention: +100 for a bullish match, -100 for a bearish match, and 0 when the pattern does not fire.

Update API

value = rtta.CDLMatchingLow(fillna=True).update(open, high, low, close)
# +100 bullish match, -100 bearish match (when directional), 0 no match
batch = rtta.CDLMatchingLow(fillna=True).batch(open, high, low, close)

update(...) consumes one OHLC bar. advance(...) uses the same inputs without returning a Python value. Scalar batch(open, high, low, close) matches sequential update on a fresh instance. With fillna=False, values are NaN until at least 2 bar(s) have been seen; with fillna=True (default), unmatched bars return 0.

Theory Of Operation

Candlestick patterns are short causal labels on bar geometry. They do not forecast returns by themselves; they tag structure (indecision, rejection, engulfing pressure, multi-bar reversals) that you can combine with trend, volatility, or volume context.

On every bar the engine forms:

\[\begin{aligned} \mathrm{body}_t &= |C_t - O_t| \\ \mathrm{range}_t &= H_t - L_t \\ \mathrm{upper}_t &= H_t - \max(O_t, C_t) \\ \mathrm{lower}_t &= \min(O_t, C_t) - L_t \\ \mathrm{top}_t &= \max(O_t, C_t),\quad \mathrm{bot}_t = \min(O_t, C_t) \\ \mathrm{mid}_t &= \tfrac12(O_t + C_t) \end{aligned}\]

A bar is bullish when \(C_t \ge O_t\) and bearish when \(C_t < O_t\). Bars are stored in a short ring; age \(0\) is the newest bar, age \(1\) the prior bar, and so on.

Shared predicates used below:

\[\begin{aligned} \mathrm{doji}(b) &\iff \mathrm{body} \le 0.1\cdot \mathrm{range} \quad(\text{or range}=0) \\ \mathrm{longBody}(b,\overline B,f) &\iff \mathrm{body} \ge f\cdot \overline B \\ \mathrm{shortBody}(b,\overline B,f) &\iff \mathrm{body} \le f\cdot \overline B \\ \mathrm{longLower}(b,m) &\iff \mathrm{lower} \ge m\cdot \mathrm{body} \\ \mathrm{longUpper}(b,m) &\iff \mathrm{upper} \ge m\cdot \mathrm{body} \\ \mathrm{smallUpper}(b,f) &\iff \mathrm{upper} \le f\cdot \mathrm{range} \\ \mathrm{smallLower}(b,f) &\iff \mathrm{lower} \le f\cdot \mathrm{range} \\ \mathrm{engulf}(c,p) &\iff \mathrm{top}_c \ge \mathrm{top}_p \land \mathrm{bot}_c \le \mathrm{bot}_p \land \mathrm{body}_c > \mathrm{body}_p \\ \mathrm{inside}(c,p) &\iff \mathrm{top}_c \le \mathrm{top}_p \land \mathrm{bot}_c \ge \mathrm{bot}_p \end{aligned}\]

\(\overline B\) is the average body over the last up to five ring bars; \(\overline R\) is the average range over the same window.

For hammer-family patterns, a light prior trend uses the previous close versus the SMA of the two closes before it:

\[\tau = \begin{cases} +1 & C_{-1} > 1.0001\cdot \mathrm{SMA}(C_{-1},C_{-2}) \\ -1 & C_{-1} < 0.9999\cdot \mathrm{SMA}(C_{-1},C_{-2}) \\ 0 & \text{otherwise} \end{cases}\]

Recurrence

Push \((O_t,H_t,L_t,C_t)\) into the ring. Detection runs only when the ring has at least 2 bar(s).

Emit \(+100\) when both bars are bearish and

\[|C_c - C_p| \le 0.1\cdot \overline R.\]

If the predicate fails, emit \(0\). The C++ path is \(O(1)\) per update (fixed ring, no full-window rescan beyond a few bars).

Implementation Notes

The recurrence is implemented in src/rtta/indicator.cpp in class CDLMatchingLow, built on shared CdlHistory / cdl:: geometry helpers. Thresholds are streaming-friendly geometric rules; they are not a line-by-line port of every TA-Lib average-body lookback table.

Reference