Greed Oscillator

This Pine Script v6 component calculates and plots a "Greed Oscillator" based on the presence of bullish candlestick patterns (Marubozu, Bullish Engulfing, Hammer, and Three White Soldiers) over a user-defined lookback period.

How It Works:

• User Inputs: length - The lookback period for calculating the oscillator, marubozuThreshold - The threshold for identifying Marubozu patterns, engulfingThreshold - The threshold for identifying Bullish Engulfing patterns, hammerThreshold - The threshold for identifying Hammer patterns, threeWhiteSoldiersThreshold - The threshold for identifying Three White Soldiers patterns.
  
• Pattern Detection: The script defines functions to detect Marubozu, Bullish Engulfing, Hammer, and Three White Soldiers patterns. Patterns are identified based on the size of the body, wicks, and specific threshold criteria.
  
• Score Calculation: The script calculates scores for each bullish pattern over the lookback period. These scores are normalized by dividing by the total number of candles in the period.
  
• Greed Oscillator: The oscillator is calculated as the average of the normalized scores for the four bullish patterns.
  
• Plotting: The Greed Oscillator is plotted on the chart, with reference lines for "Low Greed" and "High Greed" levels.
  

This indicator provides a visual representation of market greed, making it a useful tool for traders to assess bullish sentiment and identify potential reversal points or areas of heightened bullish activity. It works best in conjunction with other technical analysis tools to confirm signals.