A useful pattern marking tool.

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bowlesj3
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A useful pattern marking tool.

Postby bowlesj3 » 08 May 2009

I think a lot of traders would agree that this would be a very useful pattern-marking tool. Maybe another software package has something like this. I do not know. I have never seen anything like this before on the 5 or 6 charting packages I have used and it is unfortunate.

Background: As most traders know, the market consists of patterns, which come in all sorts of shapes and sizes and number of repetitions before they vanish. Also known is the fact that if the trader can spot the pattern early enough they can get in on it before it stops and make profits (often the pattern is a wave pattern or bounce pattern – ½ of a parent wave typically). So here is an idea for a tool that provides a method of marking these patterns on the chart for later reminder that the trader should keep looking for the completion point of the pattern. It could even have an alert attached to it for later reminding the trader maybe based upon the distance between the tips of the lines (that will hopefully become clear later)

So here is what it looks like. It is a series of straight lines that converge at one point above the market prices (or below the market prices). They are all the same color. Each line extends out to the prices to mark where the pattern first starts and where it repeats the pattern.

This is how the trader very quickly marks the pattern. They click on a button at the top in the drawing tools tool bar. They click on the point where all the lines will converge. They click above price where the pattern they have noticed first starts and the first line is drawn out (maybe it is dotted as they have specified for default or maybe it is solid or maybe each new line is different). They click the next point above price where the pattern first repeats and the second line is created from the convergence point out to that second point. They keep repeating this later phase until all the pattern points are marked. The key here is the method of marking the pattern is very fast. Maybe up to 20 of these lines could be placed (more than enough for sure). Maybe the trader could custom tailor some of them before or after the pattern-marking tool is placed on the chart.

Enhancements:

The tool can be placed on any subchart (not just above/below prices).

Once the tool is highlighted (either upon first creation or after the fact) the trader can right click to get a pallet of color they use to change the color of the tool. The custom tool bar can have any number of these tools placed on it with each having a pre-assigned color.

Wrap around text box with an arrow to where the lines converge so the trader can make notes after the trading day is finished (maybe to be saved as png or bmp picture for teaching students or whatever).

An extension line that automatically comes up X minutes later to remind the trader to look for the completion of this pattern (maybe this idea is pushing it a bit but maybe not). The idea is the distance between the lines could be analyzed by the tool and the trader could optionally be reminded X minutes in advance that they need to be looking for the completion of this pattern. Maybe the tool could optionally flash, beep, place a dotted line out somewhere, whatever. It has been my experience that the pattern is often based off some sort of bounce but this is just a reminder rather than an indicator. However I remember one time I estimated the top of a market (daily bars) using this technique to estimate the earliest likely top and latest likely top. I put a horizontal line out extending from the earliest likely top to the latest likely top as a reminder to look for other indicators during that time. Maybe that could be an option. The trader could position the line but the tool would set the start time and end time based upon the calculation of distances between pattern points. I used the tops of the waves (the pattern) to create and projection my horizontal reminder line which sat on the chart for weeks actually.

I have always felt the snap should be controlled by the tool. So this tool would be the same. The tips of the lines could be controlled by the tool optionally to snap to price or not. The standard MC default system would be used to set the snap for this tool.

Somehow new lines need to be added to the tool after it is first placed. I guess the trader could just highlight the tool and click another price bar and a new line would be added. Maybe the trader could indicate that the lines are to be completed X number of units above/below price rather than actually touch the bars and obscure them.
Last edited by bowlesj3 on 09 May 2009, edited 14 times in total.

bowlesj3
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Postby bowlesj3 » 08 May 2009

the text box could be moved independent of the tool but the arrow that points from the text box to the convergence point stays connected. The arrow can be customized or even removed.

bowlesj3
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Postby bowlesj3 » 08 May 2009

It might be possible to simulate some of this using EL code if the highlighted text option is used properly.

bowlesj3
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Postby bowlesj3 » 08 May 2009

Somehow after the fact new lines need to be added. I guess the trader could just highlight the tool and click another price bar and a new line would be added. Maybe the trader could indicate that the lines are to be completed X number of units above/below price rather than actually touch the bars and obscure them.


Regarding this idea, it would probably be best if the trader highlighted the tool, then positioned the cross hair at a bar and the trader would click where they want the line to be drawn from back to the convergence point. The line would be drawn from where the cursor was back to the convergence point. This way if there were other items on the chart he could control the line to avoid clutter.

I currently clear various lines and arrows from my charts each morning with a cleanup study. I think this type of tool should be such that it could be cleared out with such a study.

The wrap around text box probably should be optional. Some traders may not care to take notes on some days or any days and only use it as a pattern reminder.

As well as the ability to move the text independent of the lines it would be handy to be able to highlight the tool and move the convergence point while all lines stay converged at this same point.

Text box can be resized and text stays properly wrapped.

Again this is pushing it somewhat but if this tool ever came to be and if an alarm feature was ever put in maybe the trader would want an alarm at max distance between line tips, average distance between line tips or minimum distance between line tips. Lots could be done here I am sure.

bowlesj3
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Postby bowlesj3 » 08 May 2009

The trader would need to be able to temporarily hide these tools once they have served their pattern marking reminder function so that the chart can be kept clean. This would allow the trader to, at the end of the day, expose them one by one from a list for later saving to bmp files or printing. To make sure what I am getting at is clear, if three are attached to the chart but only one is marked visible then only the visible one would get put into the bmp picture file.

A cleanup study should be able to remove them regardless of whether they are visible or not.


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