Chart pattern trading is often considered to be a purely subjective field of currency trading because there are no standards to the chart pattern definitions. A trader has to use his own discretion when deciding to mark the patterns on a chart and also to do so manually. Both elements bring a lot of subjectivity and potential for errors. On the other hand, chart patterns are considered a powerful albeit poorly backtested tool for trading signal generation.
The obvious solution to this problem is introduction of automated (and thus objective) ways to mark up the chart patterns. That is why I am currently approaching the final stage of the development process of the channel detecting indicator for MetaTrader platform. The idea was to minimize trader’s influence on the detection process and to increase trader’s chances to accurately detect patterns across multiple currency pairs and timeframes.
The current version of the indicator will only be working with channels (ascending, descending and flat), but, theoretically, it could then be upgraded to detect triangles, double tops/bottoms,
You can see the preview of this indicator in the video below:
I will definitely use this indicator myself, but I am also interested in knowing whether such an automation tool could be popular among this blog’s readers.
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If you want to show us an indicator you are already using to detect channel patterns or if you have some requests for implementation of such an indicator, please feel free to comment using the form below.
