|
|
|
|
|
Forecast those charts? Ian Waugh reviews Matheny Enterprises' Pattern Forecaster Plus – a charting program for those with an interest in money
If you browse financial web sites you will doubtless be familiar with standard bar charts consisting of a vertical line with a tick on the left showing the opening price and a tick on the right showing the closing price. These work fine to indicate the price movements of a stock. However, another form of display known as Japanese Candlesticks has been popular for many years. These show exactly the same information but in a different format. The area between the open and close is a solid body. If the close is higher than the open the body is white or clear, and if the close is lower than the open the body is filled or back. This makes it very easy to see at a glance which way prices are moving. In fact, a whole art, or science, has been built around interpreting various patterns produced by candlesticks. The program recognises some 1100 candlestick patterns and you can combine these with other indicators in trading models or libraries. Different models are suitable for short-, medium- and long-term analysis. Libraries include Bollinger Bands, Tom DeMark's Sequential system and G. Strubbe's TCBR system among others (these are all explained in the on-line documentation). So, you can select favourite libraries to give you preferred treading signals. There is a host of settings for customising the indicators or you can leave them at their sensible default settings. Double-clicking on a candlestick brings up an Analysis window where the current patterns are described. The Candle Vision feature is essentially a backtest function, and once you've selected your options you can run this to see how it would have performed. The CandleWatch feature is great for anyone who likes to follow several markets. It scans a list of your favourite stocks for trading signals and reports the different types of signals it discovers. You can elect to use only specific trading modules in the scan so this is highly customisable. A relatively new feature is the Watch/Vision Table which allows you to sort, search and query the database created during a CandleWatch run. For example, you could pick up on extreme tops or bottoms, or extreme overbought or oversold conditions. You can create Custom Pages containing custom technical indicator and library settings on a per chart basis. Workspaces let you store charts and chart configurations for quick access. Although PFP recognises around 20 data types, it doesn't (yet) support CSI or CompuTrack, both popular formats. Its preference is definitely ASCII. When loading data, it loads the entire file and as the program performs a large number of calculations on it at this point, loading can take a while, even minutes. It would be very useful to be able to specify the date range to be loaded.
Support by email from the developer is usually within 24 hours and incredibly helpful. If only all software companies were as quick and thorough. Another interesting aspect of the software is that the developer usually issues about six updates per year, free of charge to registered users. Recent updates have improved accuracy and by the time you read this, charts should load faster. The program's analytical capabilities are impressive but you need to select the indicators with care and take care with the backtesting procedure. You still must use your own judgement before taking a trade. If you're a candlestick aficionado you'll love PFP. If you want to find out more, download a demo. At $25/month it's one of the less expensive charting programs and you get a lot for your money. |
Enter
PFP or Pattern Forecaster Plus. While many charting programs can
display bars as candlesticks, PFP goes several steps further by
analysing patterns and presenting reports about what the patterns
are, what they represent and what sort of action you might want to
take. In addition, it contains many traditional indicators (such as
Stochastics, MACD, RSI and Williams %R) and a host of other features
which we can only skim through here.
While
this is very useful, it could be enhanced in several ways, not least
by remembering settings such as commission and slippage, and
including more report parameters. To help you visual what's going
on, the program can show buy and sell flags on the chart.
The
Help file includes comprehensive details of candlestick patterns and
their meanings so the program works as a great candlestick learning
tool, too.