10/27/2022 |
Automated Stock & Crypto Chart Pattern Recognition: TrendSpider Software Update
Hello traders, and welcome to another exciting software update! In this update, we’re thrilled to be able to bring the first taste of Automated Chart Pattern Recognition to the platform! Details after the jump.
If there’s one style of technical analysis that most traders are familiar with, it’s chart patterns. Whether you trade specifically off of them or they’re simply one tool in your trader’s toolkit, chart patterns are an integral piece of the puzzle for many. With this update, we offer the first iteration of what will become an extensive chart pattern recognition functionality.
To start, we offer full, automated recognition of various types of triangle patterns. Triangle patterns take several forms;
- Ascending Triangles – Created by a nearly horizontal line drawn across swing highs and an ascending lower line drawn to connect higher lows
- Descending Triangles – Created by a nearly horizontal line drawn across swing lows and a descending upper line drawn to connect lower highs
- Symmetrical Triangles – Created by a descending line drawn across lower highs and an ascending line drawn across higher lows
How To Turn On Chart Pattern Recognition
In order to view the available chart patterns on your chart, simply turn on the ‘Chart Patterns’ button at the top of your chart toolbar, click the three dots next to the button and then select the chart patterns you wish to see automatically drawn on your charts.
Once you have the patterns you wish to utilize selected, they will appear within your indicator drop-down menu and can be toggled on and off using the time frame button.
Note the three dots next to each unique triangle style pictured above. When you click on those three dots, you will be able to adjust the color of the lines as well as whether you’re interested in identifying ‘Long-term’ or ‘Short-term’ triangles. Of course, longer-term triangles will start from further back in the chart, whereas shorter-term triangles will start from a point closer to the current candle.
Once chart patterns are enabled, they will appear on your charts automatically, regardless of time frame or ticker symbol. If a pattern is recognized, it will be drawn. Different chart styles (Candlestick, Line, Heikin Ashi, etc.) might reflect different patterns, so we encourage users to play around with chart styles when utilizing this new functionality.
Ascending, Descending, and Symmetrical Triangles, Explained
Ascending Triangles
An Ascending Triangle is formed by a horizontal resistance level at the top of the price action and a diagonal trend line at the bottom that connects higher lows. Not all top resistance levels will be perfectly horizontal, and this is by design. In our testing, we found that allowing a little give resulted in identifying more patterns that met the general rules of an ascending triangle.
Patterns In The Past: This tool will only detect ascending triangles which are either still forming or have just been completed recently. The platform automatically discards triangles whose apex (the point where the trendlines that form it cross) is either too far in the future or too deep in the past.
Input Parameters: The ascending triangle has only 1 parameter: Time Span. This parameter can be either short or long-term. It regulates what kind of triangles should be preferred, by adjusting a number of low-level technical inputs for the triangle recognition logic (like the length of some Fractals, other indicators, and so on). Please note that depending on a chart, both short and long-term parameters might yield the same triangle.
Descending Triangles
A descending triangle is formed by a horizontal support level at the bottom of the price action and a diagonal trend line at the top that connects lower highs. Much like the ascending triangle, the platform does allow some not perfectly horizontal yet still very close lines for the bottom line, as we’ve found that results in identifying more of patterns of decent quality.
Patterns In The Past: See ascending triangles
Input Parameters: See ascending triangles
Symmetrical Triangles
A symmetrical triangle is formed by two diagonal trend lines, one from the top connecting lower highs and one from the bottom connecting higher lows. According to the rules of our math, we prefer triangles that are either perfectly, or almost perfectly symmetrical. Formations that look like a triangle but that are too far from being symmetrical are discarded.
Patterns In The Past: See ascending triangles
Input Parameters: See ascending triangles
Scanning For Chart Patterns
Additionally, we’ve gone ahead and taken the liberty to pre-build scans for many of the most basic setups that traders might be interested in finding during the trading day. These shared scans can be found in the ‘Shared Scanner’ list to the left of your scanner. Simply type ‘Triangle’ in the search bar and all the pre-built scans will populate. Below is a list of the currently available scans:
Basic Triangle Scans
- Any Triangle In-Force
– A triangle exists on the chart
– Price is in-between the upper and lower lines of the triangle - Any Triangle Break Up
– A triangle exists on the chart
– Price was below the top line 5 candles ago, and is now above the line - Any Triangle Break Down
– A triangle exists on the chart
– Price was above the bottom line 5 candles ago, and is now below the line - Any Triangle Exists
– A triangle of any kind exists on the chart
Ascending Triangle Scans
- Ascending Triangles In-Force
– An ascending triangle exists on the chart
– Price is in-between the upper and lower lines of the triangle - Ascending Triangle Break Down
– An ascending triangle exists on the chart
– Price was above the bottom line of the triangle 5 candles ago, but is now below it - Ascending Triangle Break Up
– Ascending triangle exists on the chart
– Price was below the top line of the triangle 5 candles ago, but is now above it - Ascending Triangle Exists
– An ascending triangle of any type exists on the chart
Descending Triangle Scans
- Descending Triangles In-Force
– A descending triangle exists on the chart
– Price is in-between the upper and lower lines of the triangle - Descending Triangle Break Up
– A descending triangle exists on the chart
– Price was below the top line of the triangle 5 candles ago, but is now above it - Descending Triangle Break Down
– A descending triangle exists on the chart
– Price was above the bottom line of the triangle 5 candles ago, but is now below it - Descending Triangle Exists
– An descending triangle of any type exists on the chart
Symmetrical Triangle Scans
- Symmetrical Triangles In-Force
– A symmetrical triangle exists on the chart
– Price is in-between the upper and lower lines of the triangle - Symmetrical Triangle Break Down
– A descending triangle exists on the chart
– Price was above the bottom line of the triangle 5 candles ago, but is now below it - Symmetrical Triangle Break Up
– A descending triangle exists on the chart
– Price was below the top line of the triangle 5 candles ago, but is now above it - Symmetrical Triangle Exists
– A symmetrical triangle of any type exists on the chart
We’ve also prebuilt scripts that users can utilize to create their own unique scans for the available triangle patterns. The scripts can be found within the ‘Scripts’ button and can be loaded into the scanner as conditions via the ‘Script Actions’ button. Below is a list of the currently available scripts:
- Ascending Triangle Break Down
- Ascending Triangle Break Up
- Ascending Triangle In-Force
- Descending Triangle Break Down
- Descending Triangle Break Up
- Descending Triangle In-Force
- Symmetrical Triangle Break Down
- Symmetrical Triangle Break Up
- Symmetrical Triangle In-Force
For a video walkthrough of all the features mentioned above, here’s our founder, Dan, explaining how this new functionality works on the platform!
Help Button
If you’ve a keen eye, you’ve likely noticed the new ‘?’ button in the top right-hand corner of your top tool bar. You can see it pictured below:
This is our all-new ‘Help Button’ which, when clicked, displays a list of important help features across the platform. Included are links to our TrendSpider University videos, our Official Discord Server, Knowledge Base, Hotkey Guide, and more. Keep your eyes peeled for additions to this list!
As always, we hope you find these updates helpful. If you have any questions, feel free to reach out to us via the ‘Contact Us’ button in the bottom left hand corner of your charts!
