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A publication of
intalus.com
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TR�DINGTIPS. Issue
07
How to find the best risk/ reward opportunities based on candlestick patterns.
SCAN FOR CANDLE PATTERNS.
Philipp is the Senior Quant Analyst at Intalus. He was born in Austria
and studied electrical engineering before joining a large German bank
where he developed fully automated trading strategies for the
proprietary trading department. His book about designing successful
trading strategies has been among the top sellers in Germany for the
last two years. Currently at Intalus, he is responsible for the in-house
training of institutional traders and the development of custom-made
algorithmic trading strategies.
You may contact Philipp at
philipp.kahler@intalus.com
TR�DING TIPS. Issue 07SCAN FOR CANDLE PATTERNS.
SCAN FOR CANDLE PATTERNS.
by Philipp Kahler
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SCAN FOR CANDLE PATTERNS.How to find best performing stocks and the best risk/reward
opportunities by identifying promising candlestick patterns
Candlestick patterns have been known for more than 400 years.
These patterns are not bullet-proof profit opportunities. However, they
can be viewed as high-probability trading alerts. Think about a simple
bullish engulfing pattern. You can see a graphic example of this
pattern in the chart below. You can see two bars marked with red
arrows below. The first one marks the new market low. The second
candle is a white candle (bullish) that engulfs the body of the black
down-candle. Why is this information useful?
You have to think about market psychology to understand this pattern.
What were the market participants thinking as the market made a
new low – bearish, most likely. What has happened the day after? Did
market participants suddenly change their views into bullish when the
price action took out the high of the previous day? Where they forced
to close short positions?
TR�DING TIPS. Issue 07SCAN FOR CANDLE PATTERNS.
Fig. 1: Bullish Engulfing Pattern often show trend reversals.
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This pattern is basically a visualization of the pain that short traders
must endure when the trend is reversing. Traders might try their luck
on the bullish side after reversal as a psychological reaction to the loss
on the short position. This is exactly what happened in the graph
above. The bullish engulfing tends to be a good indicator for changing
market sentiment, albeit temporary.
Have a look at the chart below. It shows all bullish engulfing patterns
on Dow Jones Industrial over the last year. This simple pattern was
quite good indicator of turning points on many occasions.
How to chart this graph on your own and see a turning point indicator
based on the bullish engulfing pattern within the favorites list?
Very simple:
01 Open a chart for your underlying;
02 Drag and drop the “candle pattern” indicator onto the chart;
03 Go to the properties section on the right;
04 Identify and select a candlestick pattern you want to use;
TR�DING TIPS. Issue 07SCAN FOR CANDLE PATTERNS.
Watch video to see how you can
do this in Tradesignal®.
Fig. 2: Turning Point Indication at a chart of Dow Jones Industrial Average during 2013.
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SCAN FOR CANDLE PATTERNS.
It is often useful to get automatic alerts based on candlestick patterns
across a universe of underlings. You can implement this by using
market scanner. It will enable you to find all bullish engulfing patterns
(or whatever candlestick pattern you desire) within a few seconds:
01 Go to the symbol lists and select a list to scan ;
02 Right click and select “open in market scanner”;
03 Click done.
04 Drag and drop the candlestick pattern indicator onto this list;
05 Select bullish engulfing on the properties page;
06 Run the scan.
HINT.
You can do the same with the “candle patterns” indicator instead of
using the “candle pattern” indicator. It has the same effect, however,
the “patterns” indicator provides all possible candlestick patterns,
whereas the “pattern” indicator only applies one single pattern to your
chart.
Take care, take profit,
Philipp Kahler
Senior Quantitative Analyst at Intalus
TR�DING TIPS. Issue 07SCAN FOR CANDLE PATTERNS.
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© 2013 Intalus – www.intalus.com
Distribution allowed under a Creative Commons Attribution-Noncommercial license:
http://creativecommons.org/licenses/by-nc/3.0/
Tradesignal® is a registered trademark of Tradesignal GmbH.
Unauthorized use or misuse is specifically prohibited.
TR�DING TIPS. Issue 07SCAN FOR CANDLE PATTERNS.
SCAN FOR THE BEST.
How to find the best performers
out of hundreds of stocks in
seconds.
SPEED UP YOUR DECISIONS.
How to creat your own equity
basket.
AUTO-ADJUST
POSITION SIZE.
How to create and trade an
optimal portfolio.
HIGHLY EFFICIENT
SHORTING.
How to identify and profit well
from a short trade.
RULE-BASED TRENDLINES.
How to use point & figure trend
lines in candlestick charts.
PROFIT FROM
GAP TRADING.
A simple, but effective strategy.
MORE KNOW-HOW AND VIDEOS HERE
PROFIT FROM THESE TRADING TIPS AND VIDEOS TOO.
A publication of
SCAN FORTHE BEST.
How to find the best performers out of hundreds of stocks in seconds.
intalus.com
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TR�DINGTIPS. Issue
01
A publication of
How to create your own equity basket.
intalus.com
Powered by
SPEED UP YOURDECISIONS.
TR�DINGTIPS. Issue
02
A publication of
How to create and trade an optimal portfolio.
intalus.com
Powered by
CONTROL YOUR RISK.AUTO-ADJUST POSITION SIZE.
TR�DINGTIPS. Issue
03
A publication of
How to identify and profit well from a short trade.
intalus.com
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HIGHLYEFFICIENTSHORTING.
TR�DINGTIPS. Issue
04
A publication of
How to use point & figure trend lines in candlestick charts.
intalus.com
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RULE-BASEDTRENDLINES IMPROVEDISCIPLINE.
TR�DINGTIPS. Issue
05
A publication of
A simple, but effective strategy.
intalus.com
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PROFIT FROM GAP TRADING.
TR�DINGTIPS. Issue
06
www.intalus.com/tradingtips
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Trad
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TR�DING TIPS. Issue 07SCAN FOR CANDLE PATTERNS.
FIND THE BEST CANDLE PATTERN NOW.Start improving your returns or even just making your day easier. Scan for the best buy and sell
opportunities based on candlesticks. Find out how you can trade more efficiently.
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CLICK HERE b AND START TESTING THE SOFTWARE RIGHT NOW. ORDER YOUR COPY TODAY.
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