The identification of chart patterns is one of the earliest forms of the discipline known today as technical analysis. The literature on chart patterns documents many formations that are known predictors of future stock, options , commodities and FOREX price trend when important barriers, in the form of lines of support and resistance, are penetrated. However, the identification of chart patterns requires careful inspection of price data and most analysts would agree that pattern analysis is more of an art than a science.
What is a head-and-shoulders pattern to one person is not to another. Due to this ambiguity, pattern analysis has been hard to quantify and thus automated pattern recognition by computers has been a difficult problem to solve.
The release of version 9.0 of TradingExpert Pro features a breakthrough in chart pattern analysis—a Chart Pattern Recognition module that not only identifies well-known patterns and automatically draws them on charts, but alerts you when a pattern is broken. In addition, this module allows users to build trading systems based on specific chart patterns and it provides the ability to back test individual patterns to determine their effectiveness.
TradingExpert’s Chart Pattern Recognition module identifies both completed and emerging patterns. For each pattern, support and resistance lines and connector lines can be displayed on charts. Upon completion of a pattern, an arrow is drawn at the breakout point to indicate the anticipated direction of future price movement.
Completed patterns are stored with other historical data and are helpful for learning and back-testing purposes. Emerging patterns are patterns that are still in the process of forming. These are updated daily but not stored on your computer. Emerging patterns help you identify and prepare for future trades proactively.
All the major chart formations are identified. These include Ascending Triangle, Descending Triangle, Triangle, Channel Down, Channel Up, Falling Wedge, Rising Wedge, Rectangle, Head and Shoulders, Inverted Head and Shoulders, Triple Top, Triple Bottom, Flag, Pennant, Double Top, and Double Bottom.