Hi , I am trying to identify the stocks that had candlestick signs using Fcharts. Is there a formula which can search for a specific candlestick sign ? For example is it possible to get a list of all the stocks that had doji on a particular day ? Hoping to hear from you. Thanks in advance.
Hi,
Before attempting to experiment on candlestick patterns, I suggest you read the following (in case you haven't done so)
1. Candlestick Charting Techniques
2. Beyond Candlesticks
3. The Candlestick Course
All written by Steve Nison.
You can also read the following post on my blog:
http://vsundy.blogspot.com/2009/03/how-to-trade-two-day-candlestick.html
It has to be remembered that overall picture of the security in question must be analyzed first (of course using Elliott Wave Theory) before using candlesticks for reversal or continuation patterns.
Regarding formulae, there are several variations for each pattern. The most common engulfing pattern has the following variations:
1. Entire red candle, including the shadows is engufled by the real body of the green candle.
FCPro: (dojibody[1] = true or redcandle[1] = true) and greencandle = true and high[1] <= bodytop and low[1] >= bodybase
I write dojibody because a small green real body engulfed by a large green real body is also called engulfing pattern.
2. The real body of the red candle is engulfed by real body of the green candle and the shadows of red candle are engulfed by shadows of green candle.
FCPro: (dojibody[1] = true or redcandle[1] = true) and greencandle = true and bodytop[1] <= bodytop and bodybase[1] >= bodybase and high[1] <= high and low[1] >= low
3. The real body of red candle is engulfed by real body of green candle. The shadows are ignored.
FCPro: (dojibody[1] = true or redcandle[1] = true) and greencandle = true and bodytop[1] <= bodytop and bodybase[1] >= bodybase
Please note that a scan with the third formula will also include results obtained from 1 and 2.
However the effectiveness and reliability of the pattern will depend on various other factors like:
1. trend i.e whether the stock is in 1st, 3rd or 5th wave;
2. sizes of real bodies;
3. location of candlestick pattern i.e. an important support area;
4. volume;
5. confirmation on the next session.
I suggest you to read the checklist included in my blog post.
Cheers
Sundy