Analysis elements

The research results are structured in the following way:

Loss 0,2% after n candlesticks: trade is in loss when the price goes over ±0,2% from the entry price e.g. a selling signal has a trade in loss if the price increases 0,2%, or vice versa, a buy signal has a trade in loss if the price decreases 0,2%.

Loss at the end of the pattern: counts the times where a trade closed and the price had gone over the pattern extremity (maximum or minimum price) e.g. a buy signal trade in loss when the price fell below the pattern minimum, or vice versa, a selling signal trade in loss when the price climbed above the pattern maximum.

Profit> x%: the trade is in gain when it gets x% in the following periods: 3, 5, 10, 20, 30, 40, 50, 100. If the analyzed historical series includes data every minute, then a trade is in gain if it goes up x% in 3 minutes, 5 minutes, 10 minutes, 20 minutes, 30 minutes, 40 minutes, 50 minutes, 100 minutes. This trade is in gain only if it doesn’t go over the pattern extremity. Therefore a buy signal has a trade in gain if the price goes up x% in the considered period, for example in 100 periods, without the price ever falling below the pattern minimum within the same 100 periods. Vice versa, a selling signal has a trade in gain if the price goes down x% in the considered period without the price ever climbing above the pattern maximum within the same 100 periods.

Profit x% after stop: here stop & reverse trade is analyzed. If the trade loses, then the opposite trade is automatically triggered. Therefore if a buy trade loses (when the price falls below the pattern minimum), then a selling trade is triggered. So the stop & reverse transforms a losing buy trade into a selling trade,which has a loss if the price climbs above the pattern maximum.

Profit> x% and max loss 0,2%: the trade is considered profitable when the gain reaches x% in the following periods: 3, 5, 10, 20, 30, 40, 50, 100. If we are analyzing a 1 minute historical series, then the trade is gaining if it increases x% in 3 minutes, 5 minutes, 10 minutes, 20 minutes, 30 minutes, 40 minutes, 50 minutes, 100 minutes. However, this trade is in gain only if the price does not move over 0,2% from the pattern closing price which triggered the signal. Hence a buy signal has trade in gain if it has gone up x% for example in 100 periods and the price has never fallen below 0,2% from the pattern closing price (which triggered the buy signal) within the same 100 periods. Or vice versa, a selling signal has a trade in gain if it has gone down x% in the considered period and never gone above 0,2% from the pattern closing price (which triggered the sell signal) within the same considered period.

Profit> x% after stop and max loss 0,2%: a trade is analyzed again from a stop & reverse. While for the previous analysis, the stop of the new trade triggered from the stop & reverse was the opposite extremity (max or min), now the stop loss is at 0,2% from the entry price of the new trade. Therefore, for example,if a buy signal is losing, the stop & reverse triggers a selling trade at the pattern minimum (the same pattern triggering the original buy trade) and the stop of the new selling trade is at 0,2% from the new entry price in 3, 5, 10, 20, 30, 40, 50, 100 periods.

Profit> x% without loss: the trade is in gain when it reaches x% in the following periods: 3, 5, 10, 20, 30, 40, 50, 100. If we are analyzing a 1 minute historical series, then the trade is gaining if it increases x% in 3 minutes, 5 minutes, 10 minutes, 20 minutes, 30 minutes, 40 minutes, 50 minutes, 100 minutes. This trade is in gain only if the price has not moved over the pattern closing price which triggered the signal. Hence a buy signal has trade in gain if it has gone over x% for example in 100 periods and the price has never dropped below the pattern closing price (which triggered the buy signal) within the same 100 periods. Vice versa, a selling signal has a trade in gain if it has gone down x% in the considered period and never climbed above the closing price of the pattern.

Return after n candlesticks: here the probability is analyzed that the price returns to gain after being in loss. The number of times where the trade is in loss is calculated (i.e. price above the closing price if selling trade or below the closing price if buying trade) in 3, 5, 10, 20, 30, 40, 50, 100 periods, and where later the trade is in gain (i.e. price above the closing price of the buying signal pattern or below the closing price of the selling signal pattern) after 1 period, 2 periods, 3 periods, 4 periods and 5 periods and then in 6 and 7 periods after the end of the analyzed loss period (3, 5, 10, 20, 30, 40, 50, or 100 periods); in 8 and 10 periods after the end of the analyzed loss period (3, 5, 10, 20, 30, 40, 50, or 100 periods); in 11 and 20 periods after the end of the analyzed loss period (3, 5, 10, 20, 30, 40, 50, or 100 periods); in 21 and 30 periods after the end of the analyzed loss period (3, 5, 10, 20, 30, 40, 50, or 100 periods); in 31 and 50 periods after the end of the analyzed loss period (3, 5, 10, 20, 30, 40, 50, or 100 periods); in 51 and 100 periods after the end of the analyzed loss period (3, 5, 10, 20, 30, 40, 50, or 100 periods); in 101 and 200 periods after the end of the analyzed loss period (3, 5, 10, 20, 30, 40, 50, or 100 periods).

So, the probability is analyzed that the price after losing for example in 3 periods, comes back in gain in the fourth period (Return after 1 candlestick), in the fifth (Return after 2 candlesticks), in the sixth (Return after 3 candlesticks), etc. Likewise, if the loss occurs in 40 periods then the probability is analyzed that the price comes back in gain in the forty-first period next to the signal (Return after 1 candlestick), in the forty-second (Return after 2 candlesticks), etc.

Retracement at x% of the pattern: here the probability is analyzed that the price in 3, 5, 10, 20, 30, 40, 50, 100 periods retraces 38,2%; 50%; 61,8%; 78,6% of the signal pattern. For examplein the case of a buying signal, the number of times where the minimum doesn’t cross down 38,2% in 3, 5, 10, 20, 30, 40, 50, 100 periods is calculated; then where it doesn’t cross down 50% (so the number of times where the minimum has retraced between 38,2% and 50%); then where it doesn’t cross down 61,8% (so the number of times where the minimum has retraced between 50% and 61,8%); and finally where it doesn’t cross down over 78,6% (so the number of times where the minimum has retraced between 61,8% and 78,6%)in 3, 5, 10, 20, 30, 40, 50, 100 periods. Vice versa, for a selling signal is calculated the number of times where the maximum doesn’t cross up 38,2% in 3, 5, 10, 20, 30, 40, 50, 100 periods; where it doesn’t cross up 50% (so the number of times where the maximum has retraced between 38,2% and 50%); where it doesn’t cross up 61,8% (so the number of times where the maximum has retraced between 50% and 61,8%); and where it doesn’t cross up 78,6% (so the number of times where the maximum has retraced between 61,8% and 78,6%) in 3, 5, 10, 20, 30, 40, 50, 100 periods.

Loss after retracement at x% of the pattern: in general, the probability is analyzed that the price, after retracing one of the percentages listed previously(38,2%; 50%; 61,8% e 78,6%), goes into a loss area (i.e. below the pattern minimum fora buying signal or above the pattern maximum for a selling signal). For example, in the case of a buying signal, the number of times where the price doesn’t retrace over 38,2% (and also 50%, 61,8%, 78,6%) in the first 3, 5, 10, 20, 30, 40, 50, 100 periods next to the signal is calculated,and then again in the following 3, 5, 10, 20, 30, 40, 50, 100 periods (in all, respectively, 6, 10, 20, 40, 60, 80, 100, 200 periods next to the signal) the trade doesn’t go in loss area (under the minimum of the pattern buying signal or above the maximum of the pattern selling signal).

Therefore, in this case two conditions have to be verified: the price doesn’t retrace over 38,2% (and also 50%, 61,8%, 78,6%) in the first 3, 5, 10, 20, 30, 40, 50, 100 periods; b) the trade goes in loss area (under the minimum of the pattern buying signal or above the maximum of the pattern selling signal) within 6, 10, 20, 40, 60, 80, 100, 200 periods next to the signal.