05/23/2023 |
TrendSpider Software Update: Broadening Formation Recognition
How To Add Broadening Formations To Your Chart
Broadening formations can now be added to your chart automatically via the ‘Chart Patterns’ button in your top toolbar. Simply select any of the ‘Broadening’ options to see them on any chart they’re currently present on.
Broadening Formation Parameters
The various Broadening chart patterns offer several different settings that can be adjusted to influence where and how these patterns are drawn. In the image below, you’ll see two drop-down menus titled ‘Time Span’ and ‘Bands’.
Time Span
For the ‘Time Span’ setting, traders can choose between short-term and long-term. As one would expect, the long-term option will identify patterns that take into account larger periods of price action whereas the short-term option will take into account smaller periods of price action.
Bands
The ‘Bands’ option allows traders to add various styles of bands around their selected broadening pattern. These bands can be measured via an ATR, a Standard Deviation, a Constant, or a Percentage value.
Broadening Formations, Explained
Broadening formations are common chart patterns observed by technical traders, particularly those who trade in The Strat and ICT styles. A broadening formation is formed when the volatility of an asset increases, thus expanding the range of its price. In some cases, this results in both higher highs and lower lows, however, this is not a requirement for all broadening formations.
Broadening, Ascending
A Broadening, Ascending pattern is typically considered a bearish reversal pattern that forms in an uptrend and is created when the price makes higher highs and higher lows into a broadening range. The top trend line represents a resistance level and the bottom trend line represents a support level, and a trend reversal is confirmed when the price breaks below the lower trendline, preferably on volume.
Broadening, Descending
A Broadening, Descending pattern is typically considered a bullish reversal pattern that forms in a downtrend and is created when the price makes lower highs and lower lows into a broadening range. The top trendline represents a resistance level and the bottom trendline represents a support level, and a trend reversal is confirmed when the price breaks above the upper trendline, preferably on volume.
Broadening, Asymmetrical
A Broadening, Asymmetrical pattern forms in both uptrends and downtrends and is created when the price makes higher highs and lower lows. The top trendline represents a resistance level and the bottom trendline represents a support level. This particular pattern has the loosest parameters of the group, so if the angle of the trendlines creating the broadening pattern doesn’t interest you, this is the setting you’ll likely find most helpful.
Broadening, Symmetrical
A Broadening, Symmetrical pattern forms in both uptrends and downtrends and is created when the price makes higher highs and lower lows. The top trendline represents a resistance level and the bottom trendline represents a support level. A reversal is confirmed when price breaks below the lower trendline in an uptrend and above the upper trendline in a downtrend. This particular pattern has the tightest parameters of the group, requiring nearly identical slopes of the upper and lower trendline.
Broadening, Right-Angled and Ascending
A Right-Angled and Ascending Broadening pattern is typically considered a bearish reversal pattern that forms in an uptrend, with the price making higher highs and near-equal lows. The top trendline is considered a resistance level and the bottom trendline is a support level. A reversal is confirmed when the price breaks below the lower trendline, preferably on volume.
Broadening, Right-Angled and Descending
A Right-Angled and Descending Broadening pattern is typically considered a bullish reversal pattern that forms in a downtrend, with the price making lower lows and near-equal highs. The top trendline is considered a resistance level and the bottom trendline is a support level. A reversal is confirmed when the price breaks above the top trendline, preferably on volume.
Scanning For Broadening Formations
Scanning for Broadening formations is easy! To do so, click the ‘Add Parameter’ option and then select the ‘Chart Pattern’ condition. Once selected, you’ll see a drop-down menu containing the options pictured below.
If you’d like to scan for charts containing just the pattern itself, utilize the ‘Exists’ prompt. This will find all relevant charts containing the particular pattern you’ve chosen.
If you’re interested in defining the position of the price relative to the top or bottom trend line, you can do so using the ‘Bottom’ and ‘Top’ options.
In addition, we offer pre-built scans for many of the most basic broadening pattern setups that traders might be interested in finding. To access these, type ‘Broadening’ in the search bar of your scanner and the available shared scans will populate.
Available Broadening Formation Scans
- Broadening Exists Ascending – Looks for all charts containing an Ascending Broadening pattern.
- Broadening Exists Asymmetrical – Looks for all charts containing an Asymmetrical Broadening pattern.
- Broadening Exists Descending – Looks for all charts containing a Descending Broadening pattern.
- Broadening Exists R.A. Ascending – Looks for all charts containing a Right-Angled Ascending Broadening pattern.
- Broadening Exists R.A. Descending – Looks for all charts containing a Right-Angled Descending Broadening pattern.
- Broadening Exists Symmetrical – Looks for all charts containing a Symmetrical Broadening pattern.
- Broadening Exists Any – Looks for all charts containing any Broadening pattern.
- Broadening Exists Any – In Force – Looks for all charts containing any In-Force Broadening pattern.
As always, we hope you find these updates helpful. If you have any questions, feel free to contact us via the ‘Contact Us’ button in the bottom left-hand corner of your charts!
