Candle Pattern Recognition Lao-Tzu
Lao-Tzu scans the last 90 daily candles for all 61 TA-Lib candlestick patterns. Detected patterns are highlighted on the chart with plain-English explanations, confidence scoring (pattern strength + volume + breakout + 52-week context), and ATR-based price targets.
How Lao-Tzu Analyses Candle Patterns
61 Pattern Library
Every daily chart is scanned for all 61 TA-Lib candlestick patterns — from single-candle Hammers and Dojis to multi-candle Morning Stars and Three White Soldiers.
4-Factor Confidence
Confidence isn't just pattern detection. It weighs pattern strength (35%), volume buildup vs 20-day average (25%), breakout potential (20%), and 52-week high/low context (20%).
Visual Highlighting
Pattern candles are highlighted on a 90-day chart with directional arrows (green/up for bullish, red/down for bearish) so you can see exactly where the pattern formed.
ATR-Based Targets
Price targets are computed from Average True Range — conservative (1× ATR), moderate (2× ATR), and aggressive (3× ATR) — scaled by the pattern's direction.
Plain English
Every pattern comes with a clear explanation: what it is, what it means for price action, and how it works — no jargon. Lao-Tzu teaches, not just signals.
RL Integration
Lao-Tzu's score feeds into Q's 24-module DQN as the candle_pattern feature. The RL agent learns which patterns actually lead to profitable outcomes over time.