Searching for Breakouts and Flags

[bonkerrs]

I've been following the Potential Breakout and Outstanding Breakout threads for a while now. Great reading and I use it as a reference towards learning to read chart patterns. I haven't bought any positions from it because I don't want to fall into the habit of using other's work. I want to learn to do it myself. Though there has been a few of crackers that would have been very nice buying.

I was in Dymocks today looking to get a book on charting. Anyone read 'Charting for Dummies'? If so, any good as an intro book? There are soooo many to choose from... I ended up not getting one because I didn't know which to get! :banghead:

Besides searching through charts one at a time. Are there charting softwares that have a 'scanner' that bring up these potential patterns (breakouts and bullish flags)? If you are practised at these patterns and you don't mind sharing your wisedom. How do you search for them?

I'm unexperienced at this and everything kind of looks like a pattern to me!:eek7:

[nomore4s]

bonkers,

Any book with the basics of charting will be ok - you have to start somewhere. The learning curve is pretty steep at the start and can be overwhelming to begin with. My advice is just buy a couple of books or even borrow them from the library and jump in the deep end. Also scan this site using the advanced search function and you will find plenty of threads on T/A - this is where I learnt alot.

As far as scanning goes, there is plenty software around that will do it, I use Amibroker which imo is one of the best and most comprehensive packages available and it is realitively cheap although you will probably have to pay for good data. There was a code for a pennant scan posted in pennant thread for Amibroker which works really well for those patterns.

Good luck

[bonkerrs]

bonkers,

Any book with the basics of charting will be ok - you have to start somewhere. The learning curve is pretty steep at the start and can be overwhelming to begin with. My advice is just buy a couple of books or even borrow them from the library and jump in the deep end. Also scan this site using the advanced search function and you will find plenty of threads on T/A - this is where I learnt alot.

As far as scanning goes, there is plenty software around that will do it, I use Amibroker which imo is one of the best and most comprehensive packages available and it is realitively cheap although you will probably have to pay for good data. There was a code for a pennant scan posted in pennant thread for Amibroker which works really well for those patterns.

Good luck Overwhelming is the right word for it. I can't seem to focus on one subject or strategy. FOCUS!!

Amibroker. I have Prime Chart's Market Master. One of the support guys there advised me to use Wealth Lab or Amibroker for researching t/a indicators.

[saiter]

Hey bonkerss,

If you're looking for a book to buy, then "Getting started in Technical Analysis" by Jack D. Shwager is pretty good and cost me ~$35 when I bought it.
Surprisingly, the author devotes only a 3 out of 18 chapters to trends, chart patterns (flags, penants, spikes, reversals, triangles, H&S etc.), support/resistance and price ranges. The rest is trade management, trade software, managing entries, testing strategies and a chapter or two dedicated to hints/tips.
It also has one chapter dedicated to testing your T/A and trade entry/managmement abilities, which I think would be very useful for someone in your position. The author provides a historical chart on one page, giving you his reason for entry. You either agree/disagree, state why and your plan of attack, turn overleaf and see how you go. You're not meant to get them all right though :p Click on the attachment for an example.

As for scanning market patterns, I've downloaded pattern explorer and used it but I didn't "trust" it as I have my own ways of deciding if a flag is a flag or not. You can program basic stuff, like 3 bars up = uptrend, but trying to program patterns is very difficult as it is subjective whereas computers are objective.
The way I stick stocks at the moment is to scan through stocks every 4-5 days, which takes me about 30-45 minutes (you can probably do this early on a saturday morning, or maybe 15 min on saturday/15 min on sunday). Eventually you get good enough at recognising a pattern that you can just flick through charts and wait for the pattern to jump out at you.

[kam75]

I've been following the Potential Breakout and Outstanding Breakout threads for a while now. Great reading and I use it as a reference towards learning to read chart patterns. I haven't bought any positions from it because I don't want to fall into the habit of using other's work. I want to learn to do it myself. Though there has been a few of crackers that would have been very nice buying.

I was in Dymocks today looking to get a book on charting. Anyone read 'Charting for Dummies'? If so, any good as an intro book? There are soooo many to choose from... I ended up not getting one because I didn't know which to get! :banghead:

Besides searching through charts one at a time. Are there charting softwares that have a 'scanner' that bring up these potential patterns (breakouts and bullish flags)? If you are practised at these patterns and you don't mind sharing your wisedom. How do you search for them?

I'm unexperienced at this and everything kind of looks like a pattern to me!:eek7:

This is what I do every day. Searching for good setups and chart patterns ready to move. Get yourself Protrader 5.0 It scans and identifies chart patterns on stocks.

Alternatively have a look at my blog. It may be of help.
regards

[beamstas]

Amibroker :o

[kennas]

I just punch codes into the machine and look at the chart.

Amibroker can pick breakouts and flags? :confused:

Perhaps I should invest.

[nomore4s]

I just punch codes into the machine and look at the chart.

Amibroker can pick breakouts and flags? :confused:

Perhaps I should invest.

It can provided you can code it correctly :banghead:, lol. In fact if you can code it correctly it can pick up all sorts of different patterns.

The pennant scan is good as it picks up stocks I wouldn't normally pick up but you still need to filter them as some of the patterns picked up aren't worth trading.

[beamstas]

There is basically nothing Amibroker can't do
The only limit is your imagination

[kam75]

There is basically nothing Amibroker can't do
The only limit is your imagination

Hi beamstats, just curious, how long would it take you to set up Amibroker to scan the ASX for Flags, Pennants or Ascending Triangle? Does it find these patterns and are they any good? Ie, do they lead to profitable trades? Cheers

[bonkerrs]

Thanks Saiter. I'll check it out.

kam - thanks too. I had a look at your website. I was typing up my reply when you posted your latest post. I have the same questions.

The scans that charting software do to identify patterns. Would it be right to say that most of these scans are worked out from percentages (sharp rise, steady decrease).

After a pattern is identified - price action and volume. What are some other considerations before deciding it is a potential trade? I'm thinking that fundamentals wouldn't play a huge part if the trade is based on a few days turnaround.

[beamstas]

Hi beamstats, just curious, how long would it take you to set up Amibroker to scan the ASX for Flags, Pennants or Ascending Triangle? Does it find these patterns and are they any good? Ie, do they lead to profitable trades? Cheers

Not long
Depends how far you want to go
I've got some code i put together that gives potential setups
gets me down to eyeballing around 30 charts instead of 300

Of course you could spend weeks making some code to get only the best ones to show

But i rather generalize it and decide for myself

But what i said is true
There isn't much you can't do with amibroker

[canaussieuck]

In order to do a scan you first need to either write the code, or pick it from the hundreds in the site library that have been listed by users.

Then just run the code in the auto analysis over whatever data you have. After this its a matter of eye balling the charts.

As Beamstas says, its a limitless bit of software.

Oh, its fast too!

CanOz

[saiter]

The scans that charting software do to identify patterns. Would it be right to say that most of these scans are worked out from percentages (sharp rise, steady decrease).


That is up to you. You can write a script to idenitfy patterns based on absolute values (that is, today's close was above $10), relative changes (e.g. yesterdays close was below today's close) or the shape of the bar (e.g. today's close was at the upper end of the bar).



After a pattern is identified - price action and volume. What are some other considerations before deciding it is a potential trade? I'm thinking that fundamentals wouldn't play a huge part if the trade is based on a few days turnaround.


Again, this is up to you and something that you will learn with experience as you enter trades based on these chart patterns. Start paper trading with these patterns and see what happens e.g. did the flags you entered into continue the upward trend if they were near heavy resistance? if they didn't, what pattern did they turn into? how would you modify your trading strategy to enter such a trade (i.e. your stop levels, do you increase/decrease the amount of capital you are risking, do you take a short position or do you just ignore the pattern completely?)

[ceasar73]

What script do you use to program Amibroker...perl - pyhton - tcl - javascript - proprietary - all of the above???

thanks:)

[beamstas]

What script do you use to program Amibroker...perl - pyhton - tcl - javascript - proprietary - all of the above???

thanks:)

.........? AFL

[ceasar73]

.........? AFL

...AFL....WTF?:eek7:

[AlterEgo]

...AFL....WTF?:eek7:

AFL = Amibroker Formula Language

[beamstas]

...AFL....WTF?:eek7:

It's like C++...

[ceasar73]

It's like C++...


I hate C++!!!:banghead:

Anyway cheers.

[Mr J]

There is basically nothing Amibroker can't do
The only limit is your imagination

And skill? I'd love to automate my trading.

[beamstas]

And skill? I'd love to automate my trading.

Well, once you can code the only limit is your imagination.

[Mr J]

Well, once you can code the only limit is your imagination.

Unfortunately, my imagination is limited by my coding ;). It'd be hard for me to explain my methods as code.

[beamstas]

Unfortunately, my imagination is limited by my coding ;). It'd be hard for me to explain my methods as code.

Ah.

Well... If you can write it in clear english it can be coded :)

Simple Example:

Buy when a short MACD crosses a long MACD and the day is Friday
Trailing Stop loss is a 10day MA
RIsk 2% of account per trade
Pyramid at 5% profit
Tighten stop if the XJO starts trending down, to a 5day MA.

Just a simple example and a system i have never looked at, so im not suggesting anything. But basically if you can write something in clear point form like that, it is codeable.

[rja2439]

AFL = Amibroker Formula Language

How would you go about learning this language? I'm looking into purchasing Amibroker with the view in creating kick ass codes... I don't know C++ and I've only undertaken about 3-4 months of java coding that made a stickman game :cool:

Does Amibroker come with instructions or tutorials that teaches you this code?

Cheers

[nomore4s]

How would you go about learning this language? I'm looking into purchasing Amibroker with the view in creating kick ass codes... I don't know C++ and I've only undertaken about 3-4 months of java coding that made a stickman game :cool:

Does Amibroker come with instructions or tutorials that teaches you this code?

Cheers

There are plenty of resources available, it is actually quite easy (to a point) to pick up - even I'm starting to understand it:eek:. Amibroker also has a substantial help section.

I think there is quite a decent size library & database on the Amibroker site. Also there are alot of people on various forums willing to help out with info.

[beamstas]

Amibroker is extremely easy to pick up... i have no background in coding and i picked it up easily.

[kennas]

Amibroker is extremely easy to pick up... i have no background in coding and i picked it up easily.Wow!

[marknz88]

I hope this isnt considered advertising but...do a google on a book called 'Introduction to Amibroker' by Howard Brandy. (I think he even posts on these boards from time to time?)

I purchased Amibroker a few weeks ago and with the help of this book and his following book, am well and truly on my way to picking up the coding from a background of hating coding :)

It was initially quite daunting to read through the readme and I find the book a logical and easy way to go about learning AFL.

[bonkerrs]

http://i111.photobucket.com/albums/n129/forum_pix/penant.jpg
What do you think of this as a penant at the end of a flagpole? If it is considered a penant it should have broken up not down.

The share is EWC.

[rja2439]

I hope this isnt considered advertising but...do a google on a book called 'Introduction to Amibroker' by Howard Brandy. (I think he even posts on these boards from time to time?)

I purchased Amibroker a few weeks ago and with the help of this book and his following book, am well and truly on my way to picking up the coding from a background of hating coding :)

It was initially quite daunting to read through the readme and I find the book a logical and easy way to go about learning AFL.

Brilliant. That's not advertising in my eyes...just good advice... cheers for that, I'll most likely purchase it if it's the best way to go

[beamstas]

Wow!

Sorry Kennas, you've lost me mate.


What do you think of this as a penant at the end of a flagpole? If it is considered a penant it should have broken up not down.

The share is EWC.

Nothing is 100% in trading, pennants are no different..

[bonkerrs]

Nothing is 100% in trading, pennants are no different..Righto. Thanks for this Brad.

[doogie_goes_off]

That's why most pennants are seen on "potential breakout alerts', where generous members share a trend on something looking interesting on a chart.:)

[rja2439]

Just been on the Amibroker website... does any one recommend the 'professional' edition over the 'standard' edition?

I've checked the differences on the following page, and one of them is that it says no tick charts/backtesting/scanning on the 'standard' version:
http://www.amibroker.com/guide/versions.html

...but on other points it says that there is back testing? Can anyone please clarify this?

Cheers

[beamstas]

Just been on the Amibroker website... does any one recommend the 'professional' edition over the 'standard' edition?

I've checked the differences on the following page, and one of them is that it says no tick charts/backtesting/scanning on the 'standard' version:
http://www.amibroker.com/guide/versions.html

...but on other points it says that there is back testing? Can anyone please clarify this?

Cheers

The standard version is fine down 1 min.
Anything under 1min data you need pro version for.

Standard version has every other feature including backtesting and scanning... It means backtesting and scanning of data less than 1min bars..

Brad

[rja2439]

The standard version is fine down 1 min.
Anything under 1min data you need pro version for.

Standard version has every other feature including backtesting and scanning... It means backtesting and scanning of data less than 1min bars..

Brad

Thanks Brad, standard it is then since I'll be trading end of day data...

[beamstas]

Thanks Brad, standard it is then since I'll be trading end of day data...

Yep, that's what i use and there hasn't been anything i've needed so far that i don't have access to....

Cheers
Brad

[Garpal Gumnut]

What script do you use to program Amibroker...perl - pyhton - tcl - javascript - proprietary - all of the above???

thanks:)

May I just say that this guy is not me , gg, and I have asked him to change his avatar and also asked Joe.

gg

[sammy84]

I have a scanner for triangles but not pennants for amibroker, anyone kind enough to share one?

[johnnyg]

I have a scanner for triangles but not pennants for amibroker, anyone kind enough to share one?

Could you put up a couple of patterns it picks up sammy?

[sammy84]

Could you put up a couple of patterns it picks up sammy?

Not sure what you mean here. Do you want me to put the code up I have or examples of some of the stocks it finds?

It generally finds larger scale ascending, descending or symmetrical triangles, but has trouble finding the smaller congestion patterns.

[johnnyg]

Not sure what you mean here. Do you want me to put the code up I have or examples of some of the stocks it finds?

It generally finds larger scale ascending, descending or symmetrical triangles, but has trouble finding the smaller congestion patterns.

Just a few charts of stocks that are showing the patterns you describe if you could sammy.

Cheers :)

[kam75]

Jack Schwager's book Getting Started In Technical Analysis has a lot of useful info on how to identify and trade Continuation Patterns. One of the imprtant things he says which most other authors fail to mention is that about 'counter-to-anticipated' breakouts. For example, if a Bullish Flag (or an Up Flag) breaks down instead of up, it can be a particularly strong signal to go short. Seen a bit of this in the current market.

[beamstas]

i have one i found somewhere
i'll put it up later
i didn't write it but im not sure who did