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Pattern recognition software


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Pattern recognition software

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  #1 (permalink)
brags
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Posts: 27 since Sep 2015
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I have been researching various products and came across rt-alerts. I am currently on their free trial. Basically you set it up to scan various markets for certain chart patterns. I just thought I would share since there are a lot of options out there and this one is simple and effective.

Here is the video tutorial...as you can see it has an easy interface.
Real Time Chart Pattern Scanner Alerts

Here is the pop up for what patterns you want to be alerted about...beneath it you can see the stock symbols and the corresponding pattern that was detected...and the charts with the patterns highlighted. If for nothing else it is a great learning tool.



Enjoy...and if anyone has any other recommendations then much appreciated. I already have a trading platform so I am looking for a stand-alone pattern recognition platform.

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 Big Mike 
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I would recommend you read Evidence Based Technical Analysis by David Aronson before you spend any time on these patterns.

Or if you a true believer, you can look at Suri Duddella has made patterns work for him in several futures.io (formerly BMT) webinars. Hint, it's not the patterns that make him successful...

Mike

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  #4 (permalink)
 andby 
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Big Mike View Post
I would recommend you read Evidence Based Technical Analysis by David Aronson before you spend any time on these patterns.

Or if you a true believer, you can look at Suri Duddella has made patterns work for him in several futures.io (formerly BMT) webinars. Hint, it's not the patterns that make him successful...

Mike

Hi Mike,

I remember you read David's book some time ago - did you actually went through the full material ... and what were your thoughts ...
I think some of his conclusions are just ... so different from anything else ... for example:

Quote:
>>>
TA stands at a fork on the road. The traditional path continues the nonscientific subjectivist tradition of naive theories built on untestable propositions, anecdotal evidence, and intuitive analysis....
<<<

How much from what you see on this website's activity would qualify according to the above ...

Quote:
>>>
I now exercise literary license for literary effect and make the following unfalsifiable forecast: Technical analysis will be marginalized to the extent it does not modernize ... <just like> Astrology which gave birth to the science of Astronomy, now languishes to the periphery while its offspring thrives as the mainstream discipline.
<<<

In other words, all this pattern recognition <eye balling - as Dr. Gary Dayton likes to repeat so many times in his classes> screen chart based techniques so spread everywhere in TA, is just plain useless ... I'm not entirely sure what you mean with "if you're a true believer" in the above, do you think that if you fully believed with all your heart and mind in Suri's patterns - will this make you profitable in the markets?

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brags
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andby View Post
Hi Mike,

I remember you read David's book some time ago - did you actually went through the full material ... and what were your thoughts ...
I think some of his conclusions are just ... so different from anything else ... for example:

>>
I now exercise literary license for literary effect and make the following unfalsifiable forecast: Technical analysis will be marginalized to the extent it does not modernize ... <just like> Astrology which gave birth to the science of Astronomy, now languashes to the periphery while its offspring thrives as the mainstream discipline.
<<

In other words, all this pattern <eye balling> screen chart based techniques so spread everywhere in TA, is just (or will be soon) plain useless ... I'm not entirely sure why you still recommend Sury's patterns you definitely don't believe in them.

Did the fundamentals of technical analysis such as breaking support and resistance always exist or do they exist because of the forces of technical analysis being applied against them?

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 andby 
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brags View Post
Did the fundamentals of technical analysis such as breaking support and resistance always exist or do they exist because of the forces of technical analysis being applied against them?

<forces of technical analysis being applied against them> - what are the forces of technical analysis ... can you define, can you measure, can you quantify anything from certain patterns being endlessly preached by some ... show me consistency, and I mean in a statistical manner.
Support & resistance - that's a heavy one to takle. there are people believing in it, and other that did not find any edge in this. Out of 1000 people throwing heads & tails 1000 times, there might be one throwing heads 1000 times in a row. Is he the best heads thrower in the world? Check Adam H. Grimes webinar, and his trust in support & resistance.
We're playing a game of patterns, shapes and eventually shaddows my friend. It's pretty tought for our "eye ball" to distinguish an edge in these markets ... you're competing against machines that slowly dilute whatever was left from these patterns edge.

The only consistency I see in this game of patterns is the fees imposed by those selling stuff around these patterns.
And I'm not sayin these never worked - they did sometimes. However, this is an endless changing game.
And now the edge consists in how fast can you adapt yourself compared with other players to the game rules.

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  #7 (permalink)
brags
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Do the chart patterns of today exhibit the same behaviour as chart patterns prior to technical analysis being widely adopted?

I would think the more people who employ the techniques of technical analysis...the more potent it should become. For instance, let's say there are a million traders and all of them are waiting to see if a stock is about to break support. If it does, then all of them may dump it...thus putting even more downward pressure on the price...like a self-fulfilling prophecy. If technical analysis was not present to coordinate this group think mentality then the downturn would be less amplified.

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 ratfink 
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brags View Post
Do the chart patterns of today exhibit the same behaviour as chart patterns prior to technical analysis being widely adopted?

I would think the more people who employ the techniques of technical analysis...the more potent it should become. For instance, let's say there are a million traders and all of them are waiting to see if a stock is about to break support. If it does, then all of them may dump it...thus putting even more downward pressure on the price...like a self-fulfilling prophecy. If technical analysis was not present to coordinate this group think mentality then the downturn would be less amplified.

This is the fallacy of the 'self-fullfilling prophecy' argument that many also use to dismiss TA and fibs and wave patterns and such like. They say if it works at all it must just be due to what traders are seeing on their screens.

Nothing could be further from the truth - as any deep analysis would reveal. There are many thousands of traders, yet there are many hundreds of millions of investors, most of which have never seen a chart, let alone know how to spell TA.

The patterns, cycles, waves and ratios that exist in highly liquid cash markets do so simply because of the ebb and flow of human optimism and pessimism. Obviously individual stocks and levels in the futures markets get gamed by large players, options and HFT and such like but that is just noise added to the underlying movement.

The patterns I see everyday, all day are no different now than they were a century ago, just faster and with more tactics and strategies employed to game them or attempt to defeat them.

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 bobwest 
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Big Mike View Post
I would recommend you read Evidence Based Technical Analysis by David Aronson before you spend any time on these patterns.

Or if you a true believer, you can look at Suri Duddella has made patterns work for him in several futures.io (formerly BMT) webinars. Hint, it's not the patterns that make him successful...

Mike


ratfink View Post
... There are many thousands of traders, yet there are many hundreds of millions of investors, most of which have never seen a chart, let alone know how to spell TA.

The patterns, cycles, waves and ratios that exist in highly liquid cash markets do so simply because of the ebb and flow of human optimism and pessimism.
...
The patterns I see everyday, all day are no different now than they were a century ago, just faster and with more tactics and strategies employed to game them or attempt to defeat them.

My suggestion to @brags is not to bother with pattern recognition software. The people who like/use/believe in patterns generally say that recognizing them is a matter of judgment. The people who disbelieve in them generally say that they are simply subjective. Either way, I would say that if it's so hard to see them that you need a program to spot them, is there anything really there?

So learn how and whether to use them, if you find them helpful, but don't spend time and money on software that is supposed to see them for you....

The larger point is whether there is any point to them at all. Unfortunately, there are True Believers and True Disbelievers, both equally certain of their positions. We had the same clash recently in a long thread discussion on fibs. I don't know how many minds were changed, although some common ground did get uncovered after a while, in the area of practicality: use what works (for you.)

It is possible to occupy a middle ground.

@Big Mike has the position that pattern traders can be very successful, but (as in his post above), it's not the patterns that do it for them.... It's in the trader's management of the trade, of the context, and of themselves. And other aspects of the trader, more than the method. (Not trying to speak for you Mike, and apologies if I got something wrong about your views here.)

@ratfink has the position that there are patterns that exist objectively, and if you see them you can do well with them. You also need the trader's management of the trade, of the context, and of themselves. (Not trying to speak for you either, ratfink, but I think you will agree.)

The total disbelievers think it's all hogwash, and believe they have proved it by running a lot of backtesting (or, usually, reading about someone else's backtesting.) Then they have their own answers about what works, and, often, add the trader's management of the trade, of the context, and of themselves.

Hmmm....

There is something in common here.

As to what actually works, well, try it and see.

Bob.

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 ratfink 
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bobwest View Post
@ratfink has the position that there are patterns that exist objectively, and if you see them you can do well with them. You also need the trader's management of the trade, of the context, and of themselves. (Not trying to speak for you either, ratfink, but I think you will agree.)

Yes, that's correct.

Patterns exist, not because of what traders see, and not because of what they think they will do or what they think the market will do, but simply because of what institutions, investors and traders actually did do. They come embodied with all the emotion that was used in making thousands of decisions and then carry the emotion that becomes consequent on the trader's chosen action and the market's subsequent movement. I'm not just talking waves or fibs here but many valid swing based and time based s/r ranges and structures.

TA can never tell you what a market is going to do, but as a building block of context it can certainly help to understand how far, how fast and in what style or manner a market might move if it chooses one route over another.

You don't need volume or concepts of supply and demand to explain a market either. For sure a market is made up of buyers and sellers doing a whole lot of buying and selling, but absolutely none of that ever explained why anybody chose to buy or sell anything at a particular level other than the smartness of the hands on either side of the trade. Last week I removed the last vestiges of quite sophisticated volume studies that I had clung to for many moons, finally realising they are just another illusion. My charts have never looked clearer or felt better and the decision at the one place that counts just got simpler.

Now I just need to hold that trade, and that's what 2016 is for..


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 bobwest 
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ratfink View Post
Last week I removed the last vestiges of quite sophisticated volume studies that I had clung to for many moons, finally realising they are just another illusion. My charts have never looked clearer or felt better and the decision at the one place that counts just got simpler.

Now I just need to hold that trade, and that's what 2016 is for..

Not by any means to disagree, but just two additional points:

1. Sophisticated studies, volume or otherwise, can mess you up. There doesn't have to be anything wrong with them, either. It's just that you can only juggle so many items of data or relationships at once. Less really can be more.

2. "Hold that trade" is, obviously, trade management (and trader management .) I do not know that I would agree with those who believe that this is the most important part of trading, but I don't know that I would disagree, either. Assuming you've got something that gives you any kind of edge, anyway. And for all I know, it could be enough of an edge....

Getting a little off-topic, but I do think it can be brought back to the original question of chart patterns and software to recognize them. The point would be that what's in the eye of the beholder is just as important as what is on the chart, which is why some people use patterns and are successful, and others are not.

Bob.

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brags
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Granted a small percentage of investors have even heard of TA never mind utilize it...but how will it affect the way the market behaves if this number increases substantially?

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 ratfink 
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brags View Post
Granted a small percentage of investors have even heard of TA never mind utilize it...but how will it affect the way the market behaves if this number increases substantially?

Imho not at all, most will undoubtedly still follow fundamental views, news headlines, fund recommendations, etc, etc, i.e. 'get sold to'. TA simply allows us to see the trails made by global mood swings and the large players taking advantage, it doesn't allow us to create the trails.

I think the biggest gap in understanding is like an 'S' level physics question - can you get near to the right order of magnitude with a decent answer. We tend to be ultra narrow minded and highly focussed on our own little niches and like to think that a handful of traders means something, when in fact it is just noise. There is more than one order of magnitude involved in comparing satsumas and pumpkins.

Back to the original question in the title I have used a lot of pattern recognition software programs, all are still pale by comparison with the lump of wet fat we got born with. I consider myself to be a good analyst, but as we know this does not make me a trader. I hope by improving the latter I can at sometime more successfully demonstrate the depth of what I mean when I talk about the former.

To be fair, I am sure that for most people leaving out the analytical and concentrating on the tactical side of trading would be the simpler and more profitable route.


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 GFIs1 
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Of course there are many more patterns in the markets to make some decent gains.
If you only are looking for standard candle patterns like double bottom, morning star,
hammer etc. this will lead to desaster. As already a lot of people are aware.
This makes those patterns difficult to trade as the masses hang in anyway.

If you find your own fine patterns (maybe in combination with the weekday) or just
looking at Initial Balance then the chance can be good to be not on the highway of
the traders mass.

To make it clear - thinking in longer timeframes during the day makes it much easier to
"see" a pattern and of course it gives more points than searching in a one minute chart.
That is already said thousand of times here - but one can never leave it behind.

Good trades
GFIs1 who makes the most with patterns here on one single instrument

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