Candle Pattern Arrows

This Pine Script code is designed to identify specific candlestick patterns and draw boxes on the chart to highlight them. Here's a detailed explanation:

1. Purpose: The script detects two specific candlestick patterns:
- A red candle followed by two green candles with no price overlap between the first and third candles.
- A green candle followed by two red candles with no price overlap between the first and third candles.

2. Conditions:
- For the first pattern, the script checks if:
- The candle two bars ago is red (close[2] < open[2]).
- The next two candles are green (close[1] > open[1] and close > open).
- There is no price overlap between the first and third candles (high[2] < low[0]).
- For the second pattern, the script checks if:
- The candle two bars ago is green (close[2] > open[2]).
- The next two candles are red (close[1] < open[1] and close < open).
- There is no price overlap between the first and third candles (low[2] > high[0]).

3. Drawing Boxes:
- When the first pattern is detected, a red box is drawn:
- The box starts from the red candle and extends 10 bars to the right.
- The height of the box spans from the highest price of the red candle (high[2]) to the lowest price of the third candle (low[0]).
- When the second pattern is detected, a green box is drawn:
- The box starts from the green candle and extends 10 bars to the right.
- The height of the box spans from the lowest price of the green candle (low[2]) to the highest price of the third candle (high[0]).

4. Box Appearance:
- The boxes have semi-transparent borders and backgrounds to ensure visibility of the underlying candles.
- The border color is set with 50% transparency, and the background color is set with 90% transparency.

5. Positioning:
- The bar_index variable is used to accurately position the boxes on the chart.
- The starting point of the box is set to the bar index of the initial candle (bar_index - 2), and it extends 10 bars to the right.

6. Customization:
- The colors and transparency levels of the boxes can be customized by adjusting the rgb and transp values in the box.new function.

7. Historical Data:
- The script works based on historical data and does not predict future patterns.
- The boxes are drawn only after the three-candle pattern is fully formed.

This script is useful for traders who want to visually identify specific candlestick patterns on their charts, helping them make more informed trading decisions.