Stock Screener Pattern Finder
What do I believe about employing a stock screener pattern finder? It is stupid. Don’t do it!
Allow me to clarify.
I like stock screeners a whole lot. I am a big fan of them. They scan a large number of stocks in seconds. They will do what a human is able to do in an 8 hour work day in four seconds. But you have to understand where to draw the line with stock screeners.
Employing a stock screener with criteria including the price of a stock, the volume traded per day, and also a candlestick pattern is good. Where I draw the line is trying to use a stock screener to do the very subjective interpretation of stock patterns.
All pattern recognition on a chart should be left to a human. The reason is that computers lack wisdom. They’re optimal at doing large amounts of objective computational work. They’re awful at doing subjective analysis that needs wisdom.
Using a stock screener to give you buy signals on patterns is brimming with potential issues.
For example, a bullish channel breakout might be a awful buy if the stock has a history of developing volatile v tops. Especially if the v top forms on an individual stock while the overall S&P 500 is in a downtrend. Or what if unemployment numbers are released in a day that could be bad? Or let’s say the bigger pattern on a weekly chart shows a bearish engulfing candlestick or a MACD going negative? Or what about the market entering into the two weakest months of the year, September and October? Or a number of other things your personal computer that lacks wise practice simply cannot contemplate.
Technical analysis is as much an art as it is calculating numbers. Once you understand all of the technical analysis patterns over several years of trading, after this you have to forget all that objective data and learn to let the trend guide your understanding of patterns. It is simple to look down the middle of a chart and think could of, should of, would of. Though the real challenge is existing in the far right most area of the chart. Only leading traders using the right balance of left and right brain hemisphere processing and a whole lot of luck, can flourish in this region of the chart. Something a stock screener pattern finder will not have the ability to accomplish.
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Article Source: SuperPublisher.com
