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CandleScanner User Guide

1. 7 21 2014 andleScan aa P 0 Active Symbol 7 21 2014 8 4 2014 Other Interval Other Interval Th AS Bars Chart 9 2 2014 1 AVA Bars Chart 9 2 2014 Line AIRIS Averages Bands Other 9 15 2014 Line hg Indicators 9 29 2014 PRE Averages Bands Other 9 15 2014 Yv Indicators 9 29 2014 10 13 2014 10 13 2014 CANDLESCANNER USER GUIDE 16 By hovering the mouse over the tab at the edge of the container that displays the window title will cause the window to slide out over the other panels As long as the mouse cursor is over the tab or the panel itself the panel will stay visible Moving the mouse away from the tab and panel will cause the panel to collapse again to its un pinned state To dock the panel click the pin button to pin the panel in place 2 1 6 Keyboard support Some users prefer to use the keyboard rather than the mouse CandleScanner enables the user to switch between windows using the keyboard By pressing CTRL TAB the navigator selector window will appear Leave the CTRL button depressed and press the TAB button to scroll through the names of the open CandleScanner windows A list of windows in the navigator selector window sorts them by type i e tool windows and document windows To switch between these two groups use the mouse or arrow keys 2 1 7 Ribbon menu bar Ribbon bar control provides a flexible way for organizing all of the f
2. In the field Import schema optional you can select an zmport schema which simplifies the import process Please note that import schema need to be first created and also it has to be appropriate for the data being imported Import schema is a kind of a description of the ASCII format file In the schema there is information specifying the exact set of the columns ifs sequence and data type ASCII files can have a different set of columns and some values can be written in different formats date and time can be written in many possible ways Therefore if you imported once ASCII files to CandleScanner you had to provide all these information in the ASCII Data Import Wizard At the end of the import process you can save this as an import schema which can be reused next time while importing data with the same format Select checkbox Automatic quote update if you want to make CandleScanner to read the directory from which you are importing to see new quotes for more see Automatic quotes update Press Next gt button CANDLESCANNER USER GUIDE 20 STEP 2 1 Wizard reads the folder specified in STEP 7 and displays all available symbols on the left side Select symbols which you want to import to CandleScanner and press gt button You can also add all symbols by clicking on the gt gt button If you want to do the opposite use lt and lt lt button respectively You can select more than one element by pressing CTRL button or SHIFT
3. CandleScanner User Guide Version 4 1 0 Copyright 2011 2015 LEMPART All rights reserved Table of Contents k O oo 4 ld EC SO alas 5 LA Baton erg Candle connotados 5 Lo Technical eq temen pao ae 5 ASA SORA AA UE eN a ter 5 koa Ia to UCA siii bres 6 L4 sa al A A A 6 Al ACI OO gree eee ee eT eee eT ee er enn eer en ee eer ee ee ee er eee ee ye ee rr 6 APR RAS PROS Ce T ne em ee Meroe er rn ee me oe coi 6 KIo MS las a AAA no OE O one On ci 8 LEF eee Woke ADM O nee eee ee ee Ree ome nC een ae D Ce enn et enn eee ee 9 145 LS sour application Y Lar Meet yonr IP CAO ds ar a de aan 9 2 Dasr meee OPEO sn cite ceo 10 RO E ree nn mere tere Tt ter ttt 10 all Understand mado dockor Sys ening een nd a 10 AAI ae a e Mu io O e e oo E 15 ato esa o SRE a a em tree ret tert ado 13 ge oa Igoe a ae Po en 14 ye its a A e e PE oi E en eens E rr ce eee eee ee ee 15 e 17 A o AAA ii Eo AQ oo ent trr ert 17 ales PICA OA TAS na 17 224 Importida data quotes Ao CA Sc 18 A a o A II O PR AO 18 2 22 Requitemeats tor the maximum data size a a minimal time tal ancianas 19 22 Oran imported symbols AIO CLOS rm ARANA NAS 19 2224 Importe Mon TOC data Ote moore 19 Zao Otis ASEO USES iii iia ico 20 2 2 0 Usine the CandleQuote applications adata SOLOS arcada bi 21 D ES data PO PR a te 22 220 MONNAIE MOSS ENEE NANO 22 o la os eo A o oo 22 UP oo elo a e ro ro ene re Cee er 22 2 CR eo oa io ere re Te 25 OO I P I TTI a a a M TTT 24 Bast
4. PAM Number of symbols in group 30 Figure 5 7 Creating Group Statistics Symbols Statistics is created on the fly but statistics for the whole group of symbols has to be created manually 5 2 1 Patterns Occurrences tab This is precisely the same tab like the one described in 5 1 1 The only difference lies in a fact that here occurrences are calculated for all symbols within a group 5 2 2 Patterns Efficiency This tab is exactly the same as the one described in a context of symbol statistics in chapter 5 1 2 The only difference is here the statistics reflects efficiency among all symbols within a group rather than a single symbol 5 2 3 Patterns Efficiency Within Group Symbols by Pattern Type tab In this tab you can see an efficiency of all symbols from the group Each efficiency i e for each symbol is calculated for a specified pattern type e g bullish reversal patterns If pattern type is selected for all pattern types it means that patterns of all groups are considered during statistics calculation For example on the Figure 5 8 we can notice that among all patterns occurrences symbol named IFX DE DAX30 in 41 2 cases is of high efficiency This efficiency however for that symbol will be most probably different if we use a different value of Pattern Type e g bullish reversal patterns Occurrences of different efficiency groups can be expressed in number or percents You can switch this view using Num
5. You can also export data to format which can be easily understood by CandleScanner called CandleScanner format For more on CandleQuote please follow CandleQuote FAQ and CandleQuote User s Manual dis Internally when you export data from CandleQuote in CandleScanner format it is saved in ASCII file but with the structure which CandleScanner can understand This is why you do not have to tell CandleScanner during import process what is the structure of the imported data when if is in the CandleScanner format To import data to CandleScanner from CandleScanner files click Import CandleScanner button from the DATA menu on the ribbon bar This opens CandleScanner Data Import Wizard which guides you through the whole process There are 4 steps within this wizard If you need you can use lt Back button to return to the previous step STEP 1 1 Specify the folder on your computer where the CandleScanner files are stored by clicking button beside the Select folder containing CandleScanner data text field 2 Select checkbox Automatic quote update if you want to make CandleScanner to read the directory from which you are importing to see new quotes for more see Automatic quotes update in this chapter 3 Press Next gt button CANDLESCANNER USER GUIDE 21 STEP 2 1 Wizard reads the folder specified in STEP 7 and displays all available symbols on the left side Select symbols which you want to import to CandleScanner and pre
6. In other words we can quickly replicate transactions using the identified candle patterns on historic data The anticipation is that in conducting a test on past data and arriving at encouraging results this will repeat in the future In other words future performance will resemble past performance based on similar patterns of candles There are many aspects and issues which need to be considered when undertaking a thorough and realistic backtest Here we provide a few basic ideas and an overview of some of the capabilities found in CandleScanner CandleScanner allows the user to build a trading strategy without the necessity to write any code Using a simple user interface you can define your entry signal pattern and exit signal stop loss trailing stop and take profit All these building blocks are parametrized 1 e you can adjust them so they meet your requirements You can also optimize your trading system meaning you can define a range of parameters for different building blocks of your system and CandleScanner will find the optimal values of those parameters For example you can define a minimum and maximum allowable value defining the width of the trailing stop used in your trading system You specify the step increment value which will be used by CandleScanner to calculate a set of parameters defining the width of the trailing stop Every parameter value is then used by CandleScanner to perform a backtest If more than one parameter
7. Same as above but expressed in e Average Frequency This column says how often on average given pattern occurs For example if in the examined period for which statistics was calculated there was 2000 candles and a specific pattern was found 50 times it means that on average this pattern occurs every 40 candles if a candle represents one day this means that on average pattern occurs every 40 days Please note that the occurrences can be filtered by specifying a pattern type e g bullish reversal patterns bearish continuation patterns 1 line patterns etc To do so please use the Pattern Type list box from the STATISTICS menu 5 1 2 Patterns Efficiency tab This tab presents efficiency of all patterns that were found For example if the given symbol has 25 occurrences of Bullish Engulfing pattern all of them are grouped and efficiency statistics is calculated for them Efficiency is defined at the beginning of this chapter Efficiency can be seen using number or percentage values To switch between these two options use Number and Percent buttons from the STATISTICS menu Please note that the occurrences can be filtered by specifying a pattern type e g bullish reversal patterns bearish continuation patterns 1 line patterns etc To do so please use the Pattern Type list box from the STATISTICS menu O CandieScanner co x FILE HOME DATA STATISTICS a All Available Quotes TF Pattern Type
8. to run automatically the application immediately after the installation process It is recommended you run it automatically at the end of installation process in order to facilitate an uninterrupted registration a While downloading the file you may see warnings from your operating system other security software that the file to be downloaded is potentially dangerous to your computer All files downloaded from http shop candlescanner com are digitally signed giving you the guarantee that they are absolutely secure for your machine and were not tampered with by anyone In order to check if the downloaded file is digitally signed right click on it select Properties and then go to the Digital Signatures tab which contains the details of the digital signature If the Digital Signatures tab does not exist it means that the file has not been signed off by us by and can therefore be potentially dangerous that is it could be tampered by anyone When the user starts CandleScanner for the first time he she will be asked to provide the registration data This is exactly the same information which was used during opening the account process on the website in order to purchase the product CANDLESCANNER USER GUIDE 8 Login Your license has to be registered Please enter the login and password which you provided on the website sr Q CandleScanner john smith com technical analysis software Password free CandleScanner is a technical a
9. 00 15 00 14 50 14 50 14 00 14 00 13 50 13 50 13 00 13 00 12 50 12 50 12 00 12 00 11 50 11 50 11 00 11 00 10 50 10 50 Aug 20 Sep 3 Sep 18 Oct 2 Oct 16 Oct 30 Nov 13 Nov 30 2009 2009 2009 2009 2009 2009 2009 2009 140 000 000 140 000 000 120 000 000 120 000 000 100 000 000 100 000 000 80 000 000 80 000 000 60 000 000 60 000 000 40 000 000 40 000 000 20 000 000 20 000 000 0 0 Figure 3 5 Alcoa Inc candlestick chart using CandleScanner Color Theme Due to using colors it is very easy to see ong short lines green and yellow candlesticks respectively spinning tops blue candlesticks and doji candles red candlesticks 3 5 Price trend and price averages Probably one of the easiest ways to determine trend is the use of moving averages Moving average is simply an average of prices for example close prices for a certain number of candles The shorter the period fewer candlesticks to calculate an average the mote likely is to be dominated by noise rather than reflect an underlying trend In CandleScanner there are three basic types of averages simple weighted and exponential The first is the arithmetic average where each price has the same impact 1 e equal weight on the trend value The other two measures take account the element of time where essentially the more distant candle prices have less impact on the calculated trend value and the more recent prices have a greater impact Consequently the weighted and exponential avera
10. 11 21 2014 11 21 2014 11 21 2014 11 21 2014 11 21 2014 11 21 2014 11 21 2014 Basic Candles Occurrences Details Candles 3 779 3 762 3 759 3 746 3 745 3 768 3 814 3 799 3 761 3 522 3 769 3 549 3 767 Report q Number Average Occurren Frequenc 727 835 760 751 725 727 872 749 842 718 798 772 799 Info tab in group statistics is presented in the table containing following columns 5 2 45 49 5 0 CANDLESCANNER USER GUIDE 48 e Symbol and Symbol name Contains all symbols from a group for which statistics has been calculated e From day and To day Represents for which date range given symbol was included in a group statistics It can happen that although we select for example 10 years period not all symbols have data covering that period e Candles Number of candles which were included during statistics calculation again as above this value can differ from symbol to symbol e Number of Occurrences Total number of all patterns for a specific symbol e Average Frequency This column says how often on average patterns any occur 5 3 Exporting statistics to external files Symbol and group statistics can be exported to external files in the following formats e Microsoft Excel xslx e ASCII text file csv In order to export statistics make sure that statistics window is active in CandleScanner and the click on the ribbon DATA Export Excel Text For both forma
11. 249 USD Apply discount code Payment Customer details Payment method Sign in Register PayPal Y If you have an account on the CandleScanner site please sign in User User Password Password Prior Next Figure 1 1 Online shop view Clicking on the red rectangle you will be navigated to the main shop site from which you can add more products to your basket Customer details area allows you to either sign in or create a new customer s account You can notice that purchase process is made of three steps and the screen above represents the first one Second step shows the summary and finally the third one allows you to be navigated to the PayPal website where you can complete payment process Figure 1 1 shows the basket view Follow the steps to complete purchase process a If you have a discount code you need to enter it in the field Discount code and press Apply discount code button Prices will be then recalculated on the items for which a discount code is valid Please note that you can use your discount code only on this screen i e first step of the purchase step After successful payment you receive an email with instructions on how to download and install the application on your computer You will be automatically be navigated back to the http candlescanner com website CANDLESCANNER USER GUIDE 7 1 4 3 Installing your application In order to start the installation of CandleScanner you need to download it firs
12. AII M 12 Number From 1 1 2000 e Pattern a vee To 1 15 2015 v Statistics Basic Candlestick Range Candle Pattern Filter Data Patterns Occurrences Patterns Efficiency Pattern Efficiency Details Patterns Occurrences by Date Basic Candles Occurrences Info ID al inn homed a si isa 1 3 bars Candle Pattern re of sisi M Medium efficiency 4 6 bars M High efficiency 7 10 bars SNS a aia I I I I I smb A o vircon an 5 nme itera E ll os Engi e yA Engulfing AOSD adidasa Jia MM S Tum Down 43 879 ALV DE Allianz SE 1d a SE T ES Harami 42 90 0 MAWA Paca A 4 lt Hanaina Man 41 922 Figure 5 3 Patterns Efficiency tab of the symbol s statistics module Use Pattern Type list box marked in the red rectangle to filter patterns type When looking on the screen we can notice for example that Rzszng Window pattern was false in 19 3 of all its occurrences whereas 36 5 of occurrences are of high efficiency This view can be seen also using number values rather than percents It may be very important especially when overall occurrences number for a given pattern is fairly low Looking on the screen we can notice for example that Rising Window pattern was false in 19 3 of all its occurrences whereas 36 5 of occurrences are of high efficiency CANDLESCANNER USER GUIDE 43 5 1 3 Patterns Efficiency Details Yet another perspective on looking at patterns efficiency Here we can assess in detail every
13. EEEE E 46 5 2 3 Patterns Efficiency Within Group Symbols by Pattern Type tab 46 sat Basic B tici eney Within Group Symbols by Pate rit Tab rss titi 47 525 Baste Candles Occurrences TAD ii A A Ed 47 220 Paie Candes ec ieee Del aa 47 a RS DO A E E E E E 48 Sa Apot eto RC 49 0 Bac OS a 50 7 Technical and it 51 TL Wofki e with technical analysis indicators on the Dita 51 E O e a a o E E E o E A 52 CLZ Hidir mdee onie CMa oriol 53 TLS RO VITE REC ARO NS AO RCA MA ern ye eT Ore are OO o rer eres er UnenT oom 53 AE Ns abi A bal alher ico AA noo o E en Oo O emer ere 54 Appe di ar supported candle paer nS iia 55 A A 55 e RSS rete coct ordered dd teicada 992 PE Com DA E OO N 62 ES AS a a A AOE AEE AE A E EEE ee 70 a Our D icing sap loca opacos N R errr tr rn ter rr rrr tes 78 A e E POE Pm E a 1 Introduction CandleScanner is a technical analysis software package created for investors interested in Japanese candle patterns What makes this application exceptional is that from the outset it has been specifically designed for the detection of Japanese candle patterns It is not just an add on to an existing analysis platform but a specialist charting application written by people with an extensive knowledge of the topic of Japanese candlestick patterns It is suitable for both seasoned traders and complete beginners Japanese candle patterns are well known and routinely implemented in displaying price behavior Howe
14. Label menu Selection of more than one item from the pattern list is possible by holding the C 7 key down and selecting each pattern by eft clicking the mouse CandleScanner then indicates on the chart all of the selected pattern occurrences Please note however that it can happen that not all occurrences can be visible on the chart if the period between first and last pattern is too long so that they cannot be seen on the screen without scrolling it When you click on an item from the list of found patterns and this particular pattern occurred in a period which is not currently visible on the chart it will be automatically scrolled to enabling you see it 4 2 2 Synchronization between the list of found patterns and the price chart CandleScanner provides the possibility to synchronize the list of found patterns with the price chart and vice versa This means that you can for example scroll the list of found patterns and the price chart will automatically scroll so that you can see the time periods on the chart For this reason the list of patterns is always sorted by the date of occurrence in ascending order The reverse order of synchronization is also possible i e you can scroll the price chart and the list of found patterns will also be scrolled enabling you to see the patterns from that period which is displayed on the price chart Synchronization can be switched on off separately for price chart and pattern list via the ribbon bar using
15. V E RE Scanner Price Chart Recent Symbol Group Tests Quotes Patterns CAT Settings Patterns Statistics Statistics Table Dictionary Scanner New Window Active Symbol Interval Indicators i Mm Ae Averages Bands Other v v w 1d z _P SMA C 10 45 68 soruedoud sjoquus sdno1s 2 10 2003 Number of symbols in group 30 Figure 2 14 Zooming buttons marked in red rectangle CANDLESCANNER USER GUIDE 24 3 Basic candle concepts This section covers concepts and terminology related to candlesticks which are important to understand when using CandleScanner In addition to the commonly known candlesticks CandleScanner goes beyond the basics and employs an advanced methodology which can be adapted by more experienced users Less experienced users can simply look at the patterns recognized and generated by CandleScanner and just check their efficiency and other statistics However if you want a more in depth understanding beyond basic candle patterns it 1s important to learn and understand CandleScanners capabilities In Appendix A we provide a visual display and a brief description of a variety of basic candles and candle patterns This User Guide is not the place to go into a full discussion and interpretation of candle patterns in textbook fashion especially into all of the potential bullish and bearish candlesticks patterns which exist There are literally dozens of bullish and bearish ca
16. body of the previous period EN o Close LR _ Open LN Low Period1 Period Period 1 Period Figure 3 2 Blended candles result in a combination known as Hammer Hanging Man The two individual candles form what is known as a Bullish Engulfing pattern the single resulting blended candle being a Hammer Hanging Man Because basically they look the same we can only differentiate between them by context i e Hammer can be formed in a downtrend and the Hanging Man in an uptrend The interpretation placed on the Hammer is that it signals a potential bullishness in the market that is a potential bullish reversal after a prolonged down trend To understand how to construct blended candlesticks we need to first understand the notion of base time interval used in CandleScanner The base time interval of the symbol is the minimal time interval which can be used for the given symbol which is imported into CandleScanner For example having imported the quotes of EUR USD symbol expressed in 15 minute time intervals allows us to plot the chart as 15 minute cahrt or any multiple of 15 minutes e g 30 minutes hourly daily With the base time interval equal to 15 minutes you cannot however plot the chart made up of 20 minutes candlesticks Some software on the markets allows this but it does not make sense and as a result incorrect data is presented When we have say 15 minutes quotes it means that we have the fo
17. container click the splitter bar between two adjacent docking containers and drag the splitter to the desired location Containers will automatically resize themselves to fit the space available You can find the splitter bar between docking containers as shown in the screen shot Figure 2 4 below Symbols e 2d E Mame Caterpillar CSCO Cisco Systems CVE Chevron DuPont General Electric i SERS u oo obti at Figure 2 4 When the mouse hoovers over the sp ter bar the mouse icon changes into a line and with bidirectional arrow pointers To begin resizing move the mouse over the splitter area until the splitter mouse icon appears the icon is a line with upward and downward pointing arrows see Figure 2 4 Then hold the left mouse button down and drag the splitter to a new location To complete the resize release the mouse button dropping the splitter bar in its new location The panels to either side of the splitter will be resized in relation to the new splitter position 2 1 3 Docking windows assistant The so called docking windows assistant is a feature in CandleScanner which helps to pinpoint drag drop destinations for windows being moved within the application This tool is made up of an outer zone and an inner zone of controls The outer zone consists of four satellite grips situated at the four points of a virtual compass over the docking container It is used for positioning a window re
18. day cannot be a Four Price Doji CANDLESCANNER USER GUIDE 59 Pattern 5 Description one line P Name Northern Doji Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Southern Doji Name Southern Doji Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Northern Doji Construction e doji candle with one or two shadows e if there was a doji candle on the previous day doji body needs to be above the body of the previous day e if there was not a doji candle on the previous day then O inthe case of black body the opening price of the next day needs to be above or at the opening level of the previous day in case of white body the opening of the next day needs to be above or at the closing level of the previous day e low price below the high price of the previous day e low price above or at the level of the trend line e the length of shadows is not important e doji candle with one or two shadows e if there was a doji candle on the previous day doji body needs to be below the body of the previous day e if there was not a doji candle on the previous day then O in the case of black body the opening price of the next day needs to be below or at the closing level of the previous day O incase of white body the opening of the next day needs to be below ot at the opening level of the previous day e high price above the low price of the previ
19. in an uptrend o white body second candle o white body o low above prior high third candle o black body O opening within the previous body o closing within the first candle body Le the gap between two white candles is closed CANDLESCANNER USER GUIDE 1 Pattern one line Description Name Downside Tasuki Gap Japanese name shita banare tasuki Forecast bearish continuation Trend prior pattern downtrend Opposite pattern Upside Tasuki Gap Name Upside Tasuki Gap Japanese name uwa banare tasuki Forecast bullish continuation Trend prior pattern uptrend Opposite pattern Downside Tasuki Gap Name Evening Doji Star Japanese name yoi no myojyo doji bike minamijyuji set Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Morning Doji Star Construction first candle o candle in a downtrend o black body second candle o black body o high below prior low third candle o white body O opening within the previous body o closing below the closing from the first day i e the gap between two black candles is not closed first candle o candle in an uptrend o black body second candle o black body o high below prior low third candle o white body O opening within the previous body o closing above the closing from the first day i e the gap between two white candles is not closed first candle o candle in an uptrend o white body second candle o doji c
20. is optimized CandleScanner uses all possible combinations of parameter values and for every single combination performs a backtest At the end of the optimization process CandleScanner presents the list of results which can be sorted or filtered as required Backtest results contain many metrics which can help you to see how your trading idea s performs You can also export backtest results and process them for example in a spreadsheet or some more focused software dedicated to trading system analysis Another nice feature of CandleScanner is that every single transaction from the backtest can be displayed on the chart showing all the most important components such as entry point stop loss and trailing stop take profit CANDLESCANNER USER GUIDE 50 7 Technical analysis Some traders combine Japanese candlestick patterns with technical analysis indicators In this section we present several technical indicators supported by CandleScanner together with a short description This is not intended to be a detailed guide to the various indicators which are covered by several excellent texts There are two main groups here e Technical overlays Indicators from this group use the same scale as prices and therefore can be plotted on top of them For example in CandleScanner you plot a Simple Moving Average of close prices directly onto the candlestick chart Moreover you can then directly compare the two e Technical indicators Indicator
21. it is best to make sure that the loaded data sets are no larger than needed because the larger the data to process the lower the performance of the application For more on this please look at Scanning speed and some performance recommendations in this Guide 2 2 3 Organizing imported symbols into groups You can think of groups in CandleScanner as of folders directories in your operating system where you store your files called symbols in CandleScanner terminology For example you decide to create a NASDAQ group into which you import all the components symbols for this particular stock index There are a few restrictions and rules which apply to both groups and symbols e Groups cannot be embedded within other groups e Every group must be either of type raday or EOD end of day e Group names have to be unique e Symbols always belong to a particular group e Symbol names tickers must be unique within a given group the same symbol name can exist however in other groups You can move symbols between groups similarly as you can move files between folders in your operating system Symbols can be moved to other groups if they are the same type as the current group You also can remove delete symbols from the group Groups can also be renamed When you create a group and import symbols CandleScanner assigns to the group a ype reflecting the time interval There two types ntraday for all data quotes smaller than a day and EOD en
22. price o closing below the midpoint of the prior body first candle o any candle in an uptrend except Four Price Doji o body above the trend line second candle o black body o body below the trend line first candle O any candle in a downtrend except Four Price Doji body below the trend line second candle o white body o body above the trend line CANDLESCANNER USER GUIDE 68 Pattern one line Description Name Tweezers Bottom Japanese name kenukizoko Number of candles 1 2 3 4 or more Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Tweezers Top Name Tweezers Top Japanese name kenukitenjo Number of candles 1 2 3 4 or more Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Tweezers Bottom Name Two Black Gapping Candles Forecast bearish continuation Trend prior pattern downtrend Opposite pattern none Construction first candle o candle in a downtrend o any candle except Four Price Doji second candle o any candle except Four Price Doji o low matches the prior low every subsequent day o any candle except Four Price Doji o low matches the prior low first candle o candle in an uptrend o any candle except Four Price Doji second candle o any candle except Four Price Doji O high matches the prior high every subsequent day o any candle except Four Price Doji O high matches the prior high first candle o can
23. sama IV fo A a 1 E Ea Sana F IV v Y gt Scanner Price Chart Recent Symbol Group Tests Quotes Patterns vz 15 m 0 O Other Bars Line Averages Bands Other Settings Patterns Statistics Statistics Table Dictionary v v New Window Active Symbol Interval Chart Indicators ZZ DAX 30 StatGr 1d ORG AX Stat 1d s ADS DE Tab 1d 3 OZ z Friday Black Spinning Top upper shadow 1 2 Pattern Type 11 21 2014 long line body 38 1 79 All 0 02 0 04 9 0 32 0 63 V 19 978 900 lower shadow 60 7 candle 7 819 _P SMA C 10 50 84 Pattern All a Group statistics Found Patterns 1 917 M All Available Quotes Date Candle Pattern 1 11 2000 az 11 11 2014 Engulfing 11 6 2014 Hanging Man 10 28 2014 Rising Window 10 21 2014 Three White S 10 15 2014 Takuri Line 10 6 2014 Turn Up 9 25 2014 Engulfing 9 24 2014 Tweezers Top 9 19 2014 Rising Window 9 16 2014 Three Inside U Wal Mart F TA 9 15 2014 Harami ExxonMobil r 9 8 2014 Tasuki Line 9 3 2014 Tweezers Top ill 9 2 2014 Harami Symbol vz 8 8 2014 Homing Pigeo Symbol name Verizon 8 18 2014 9 2 2014 9 29 2014 10 27 2014 11 10 2014 8 6 2014 Falling Windo Ej 11 11 2014 X DA Travelers UnitedHealth Group United Technologies oon Dw ah un 1 1983 11 21 _V SMAIV 10 12 19 8 6 2014 Hammer 7 29 2014 Rising Window 7 22 2014 Northern Doji 7 8 2014 Turn Down 6 9 2014 Engulfing
24. settings can be very powerful in terms of flexibility please note that they should be reserved for advanced users who understand what they are doing For less experienced users default settings should be enough CANDLESCANNER USER GUIDE 38 4 5 Practical recommendations on using CandleScanner In this section we provide the users with some practical advice on how to use CandleScanner in the most effective way 4 5 1 Scanning only interesting patterns CandleScanner recognizes 86 candlestick patterns excluding basic candles By default CandleScanner uses all of them during the scanning process You may however disable some patterns from the scanning process To do so please go to FILE Settings gt Candle Patterns Please note that basic candles are always included in the scanning process 1 e they cannot be disabled as can candlestick patterns This is due to the fact that basic candles are the building blocks for other patterns and therefore always need to be active during scanning 4 5 2 Scanning speed and some performance recommendations Overall CandleScanner is very efficient when it comes to the speed of its scanning algorithms Performed tests show that on a computer with an Intel Core 17 2 70 GHz processor the application finds on average 3 700 patterns per second Nevertheless it is good to follow few simple recommendations when using CandleScanner in order to make the work more efficient In general there are three ma
25. the components presented on that figure are described in the subsequent subsections CANDLESCANNER USER GUIDE 11 4 NO o DATA VIEW Ta 2 R MOE El pma ama SR Scanner Price Chart Recent Symbol Group Tests Quotes Patterns 15M v Gn m Y Settings Patterns Statistics statistics Table Dictionary Scanner New Window Active Symbol Interval Groups 7 E E IBM Stat 1d s DJIA StatGr 1d TEM a 23 Patterr A Name Interval Tuesday O 191 59 L 191 56 7 22 2014 C 194 09 H 194 72 Ce lt 34 am 250 131 316 1 65 SMA C 10 19048 SMA C 10 19048 Harami Precious Metals World Stock Indexes ph s a Symbol Name Interval CAT Caterpillar 1d MALENA csco Cisco Systems id CVX Chevron 1d DD DuPont ld DIS Walt Disney id GE General Electric id GS Goldman Sachs 1d a HD The Home Depot id BM O Mt INTC Intel 1d JNJ Johnson amp Johnson 1d JPM JPMorgan Chase 1d x Figure 2 2 Clicking on the DJIA item in the Groups tool window causes the reloading of the DLJA components in the Symbols tool window which then displays the DJLA components symbols as shown Additionally the currently active document window which contains the FILE HOME DATA VIEW Groups m W i NN Pattern Trend C Market Data P2 ab OBullish Chart With List KA E Symbols om y y Volume Pattern List P3 Ys Bearish List With Chart eH e af Default Classic Candle Trend Name iqi Crosshair None Style j W Volume Tre
26. the existing application in order to avoid any problems or conflicts with the newer version Before this we highly recommend you backup any files or settings from your existing installation 1 4 6 Uninstalling your application Your application can be easily removed from your computer via Control Panel of your operating system Control Panel Uninstall a program select CandleScanner and press the Uninstall button Follow the instructions to complete the process CANDLESCANNER USER GUIDE 9 2 Basic interface operations I this section we describe the basics of CandleScanner which are used most often on a daily basis by users 2 1 Main window interface CandleScanner is a highly customizable application which can be configured to meet uset s specific requirements The application is composed of several windows which can be managed in many ways CandleScanner implements a so called docking system which is employed in other professional specialized software such as Microsoft Visual Studio and used to develop software CandleScanner has the following features with regard to its windows management system e Containers for windows contain dockable windows Containers can fill the entire CandleScanner area or can be limited to any rectangular area chosen by the user e Tabbed windows which can be switched between resized dragged to arrange in various configurations and closed e Windows from the main CandleScanner window can be dragged out
27. within the previous body o closing above the prior close price first candle o candle in an uptrend o white body second candle o doji candle o high below the prior low third candle o black body o high below the prior low CANDLESCANNER USER GUIDE 70 Pattern one line Description Name Deliberation Japanese name akasansen shianboshi Forecast bearish reversal Trend prior pattern uptrend Opposite pattern none Similar pattern Advance Block Name Downside Gap Three Methods Japanese name shita banare sanpoo ippon dachi Forecast bearish continuation Trend prior pattern downtrend Opposite pattern Upside Gap Three Methods Name Upside Gap Three Methods Japanese name uwa banare sanpoo hatsu oshi Forecast bullish continuation Trend prior pattern uptrend Opposite pattern Downside Gap Three Methods Construction e first candle o candle in an uptrend o white body second candle o white body O opening above the prior open price o closing above the prior close price third candle o white body opening slightly below or above the prior close price o closing above the prior close price first candle o candle in a downtrend o black body second candle o black body o high below prior low third candle o white body O opening within the previous body o closing within the first candle body Le the gap between two black candles is closed first candle o candle
28. 10 Symbol MESRA TSE Black Candle 11484 133 186 206 152 175 210 239 034 04 Symbol Name Interval 3 6 30 2008 Black Spinning Top 40 11 1 21 1 30 1 16 1 88 1 18 3 02 2 31 2 77 4 00 3 88 4 2 20 2009 Black Candle 25 31 0 92 0 87 1 05 1 12 2 30 231 241 2 38 2 58 2 37 ADS D Adidas AG id Figure 5 4 Patterns Efficiency Details tab of the symbol s statistics module Use Pattern list box marked in the ted rectangle to filter pattern for which we want to see detailed efficiency statistics 5 1 4 Patterns Occurrences by Date tab It is a simplified view of the previous detailed efficiency statistics In this tab we can see all dates when a given pattern occurred O Candiescan ner NIN FILE HOME DATA STATISTICS All Available Quotes He Pattern Type Y 12 Number From 1 1 2000 7 Bullish Doji Star O Calculate Percent To 1 15 2015 statistics oasis Range Candle Pattern Filter Data Patterns Occurrences Patterns Efficiency Pattern Efficiency Details Patterns Occurrences by Date Basic Candles Occurrences Info No Date Candle Pattern Candles Forecast 1 9 22 2000 Doji Star 2 bullish reversal EEE Doji Star 2 bullish reversal 3 Doji Star 2 bullish reversal a 27202009 Doj star 2 Jbulishrevenal Name Interval Figure 5 5 Patterns Occurrences by Date tab of the symbol s statistics module CANDLESCANNER USER GUIDE 44 5 1 5 Basic Candles Occurrences tab This tab lists all d
29. 25 000 000 25 000 000 20 000 000 20 000 000 15 000 000 15 000 000 10 000 000 10 000 000 5 000 000 5 000 000 0 0 Figure 3 6 A so called bearish engulfing candle pattern is forecasting a reversal of an uptrend into a downtrend The first bearish engulfing pattern is not recognized as a valid pattern because the trend requirement was not met candles were not above the moving average line In this particular case CandleScanner required that an uptrend needs to last at least three candles days prior to the occurrence of the candle pattern As an example Figure 3 6 shows how the classification of patterns works according to the trend on the chart We have three examples of the candle patterns typical for a bear market To be considered a bearish reversal signal there should be an existing uptrend to reverse However only in the second and third case with a simple moving average of 10 candles clearly indicating the uptrend we consider a bearish reversal pattern as valid In the first case despite the fact that bearish reversal candle pattern occurred ultimately it is not recognized as a valid one the uptrend lasted only for one candle one day in this case which is not enough The settings on CandleScannet s search algorithms are described in the section 4 4 Scanner settings CANDLESCANNER USER GUIDE 34 4 Scanning candlestick patterns Candlestick patterns scanning functionality is the central and most important feature of Ca
30. 8 9 15 2014 Marami MSFT Microsoft 9 8 18 2014 Rising Window NKE Nike 10 8 11 2014 Rising Window Pre Pfizer 11 7 15 2014 Turn Down na 5 PG Procter amp Gambie 12 10 2014 Descending Hawk a 63204 TAIANA TIANA T204 7 28 2014 8 4 2014 Bis _ m 5 25 2014 57204 58 2024 3 15 2014 9 22 2034 9 23 2014 20 6 2024 10 13 2014 Figure 2 5 Drop hint is a shaded blue rectangle in the top right side of the window It shows where the window will be located after the drop After the drop is made CandleScanner automatically resizes windows containers to fill the available space In addition to moving windows from one docking container to another you can place multiple windows into the same visual space so that they overlap Each window within the overlapped docking area is accessible by use of document tabs To place a window as a tab use the drop target icon at the center of the compass when you drag a window to its destination The two windows will overlap each other at the site of the destination Other docking containers and windows will resize themselves automatically to fill the available space To un tab a window drag the window tab into a docking container using the docking assistant 2 1 4 Floating windows Both document and tool windows can be switched into so called floating mode There are multiple ways to float a tool window e Drag the tool window out of the docked container area to an existing floating container e Drag the tool window t
31. DS DE Tab 1d s ADS DE 1d 3 v x Patterns Occurrences Patterns Efficiency Patterns Efficiency Within Group Symbols by Pattern Type Patterns Efficiency Within Group Symbols by Pattern BasicC 4 D Y UM False forecast Low efficiency 1 3 bars Candies Number of Average I Medium efficiency 4 6 bars WB High efficiency 7 10 bars Occurrences Frequency FTSE 100 Precious Metals DBK DE 3 769 40 94 2 DTE DE 3 767 40 94 2 DTE DE EOANDE 3 740 40 935 sr SE gt Commonwealth Bank of id TY SIE DE SIE DE 3 761 37 101 6 col AX CSL limited 14 Ea SS Figure 5 9 Patterns Efficiency Within Group Symbols by Pattern tab of the groups s statistics module For example on the Figure 5 9 we can notice that all occurrences of Bullish Engulfing pattern are of high efficiency for CBK DE DAX30 symbol Occurrences of different efficiency groups can be expressed in number or percents You can switch this view using Number and Percent button from the STATISTICS menu 5 2 5 Basic Candles Occurrences tab This tab lists all dates in which specified basic candle occurred Tab uses the same approach as the one dedicated to patterns see chapter 5 1 1 5 2 6 Basic Candles Occurrences Details tab This tab presents how many occurrences of specific basic candle are for every single symbol within a group Please note that you basic candle can be selected via list box on the ribbon bar CANDLESCANNER USER GUIDE 47 O
32. Pattern To Calculate Ya Percent To 1 15 2015 statistics Basic Candlestick Candle Pattern Filter Data Patterns Efficiency Pattern Efficiency Details Patterns Occurrences by Date Basic Candles Occurrences Info Numbe Average Occurr Occurrenc Frequency Candle Pattern 51 702 49 6 74 43 5 91 5 64 Allianz SE 1d 5 50 BASF SE ld Bayer AG ld Beiersdorf AG ld Bayerische Motoren Wer Commerzbank AG ld Continental AG ld Daimler AG ld Properties Symbol ADS DE Symbol name Adidas AG From 2000 01 03 To 2014 11 21 Intanual 14 PECERA NE SR 011 2014 LEMPART All rights reserved Number of symbols in group 30 Figure 5 2 Patterns Occurrences tab of the symbol s statistics module Use Pattern Type list box marked in the red rectangle to filter patterns type CANDLESCANNER USER GUIDE 42 In this tab you can see how many patterns occurrences were detected by the application On the left there is a pie chart where every piece is reserved for a different pattern When you click directly on the chart appropriate row from the list on the right will be selected When any item from that list will be clicked then the appropriate pie chart piece will be enlarged List on the right is composed of the following columns e Candle Pattern Simple name of a candle pattern e Number of Occurrences Says how many occurrences were found for a specific period e Occurrences
33. Scanner can read ASCII file with market quotes in a form so called comma separated values CSV file which has a separator character between fields Before importing such data into CandleScanner we need to provide information explaining how to interpret the file format e g what is the separator character or the meaning of the fields MetaStock data format This format is widely used to store market quotes The advantage of this format over the ASCII format is the ease of import because the user does not have to provide information how to interpret the file The drawback however can be that it cannot be opened and read in the text editor because this is a binary format i e understandable only by the computer CandleScanner format You obtain this data format if you use the CandleQuote application Technically this format is saved as an ASCII file but in a way which enables simple import into the CandleScanner application CANDLESCANNER USER GUIDE 18 2 2 2 Requirements for the maximum data size and minimal time interval CandleScanner accepts a data size up to 500 000 quotes half million per symbol with the minimal time interval of 1 minute This for most users probably more than sufficient For example 500 000 quotes are equal to e 347 days of 1 minute time intervals e 83 years assuming there is 250 trading days in a year of hourly time intervals e 2000 years assuming there is 250 trading days in a year of daily data In general
34. Scanner with all panels visible price panel always visible cannot be hidden labeled as P volume panel can be hidden from the ribbon via VIEW Chart Volume labeled as M 1 3 indicators panels which can be hidden via VIEW gt Panels I1 I2 I3 Please note that volume panel can be shown only if the underlying data contains volume quotes 7 1 1 Adding an indicator to the chart Indicators can be added only from the ribbon bar using buttons from the HOME Indicators group Clicking on any button from this group expands the list of available indicators When any item from this list is clicked a popup window is opened in which indicator s parameters can be set with its location on the screen AIRE Averages Bands Other F F Indicators Figure 7 2 Indicators are split into three major functional groups Please note that every indicator has its own list of parameters and can look differently CANDLESCANNER USER GUIDE J2 Period E K Average 35 D Average of Chart Type Spline Size Color M Level Level 1 Level 2 Color Level Figure 7 3 Typical window for adding editing technical analysis indicator On the figure example showing Szichastic D indicator 7 1 2 Hiding indicators on the chart If on the given panel there are more than one indicators some of them can be hidden without hiding the whole panel To do it right click on a given panel and select Hide item To
35. ack body e second candle o white body O opening below or at the low of the first candle o closing at least halfway up the body of the black candle from the first candle closing below the opening on the first candle e first candle o candle in an uptrend o white body e second candle o white body o body resides within the body of the first candle e first candle o candle in a downtrend o black body e second candle o black body o body resides within the body of the first candle CANDLESCANNER USER GUIDE 62 Pattern one line Description Name Bearish Doji Star Japanese name doji bike Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Bullish Doji Star Name Bullish Doji Star Japanese name doji bike Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Bearish Doji Star Name Bearish Engulfing Japanese name tsutsumi Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Bullish Engulfing Extended pattern Three Outside Down See Also Last Engulfing Bottom Name Bullish Engulfing Japanese name tsutsumi Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Bearish Engulfing Extended pattern Three Outside Up See Also Last Engulfing Top Name Falling Window Forecast bearish continuation Trend prior pattern downtrend Opposite pattern Rising Window Remark pattern is bearish reversa
36. al e g daily weekly monthly is not always and most likely is not the same as the n base time interval candles i e the combination of an identical number of candles It may so happen that due to holiday for example there are less than 5 working days in a certain week If we have daily candles base time interval of the candle is one day and display them on the chart in weekly time intervals this combines the daily candles for the week in question irrespective of how many actual daily candles there were that week in this case the weekly candle would be a blend consisting of 4 daily candles Had we used a time interval consisting of 4 candles for a given week say because of a one day holiday that week the resulting profile of blended weekly candles would consist of different numbers of daily candles For this reason CandleScanner employs the notion of n base time interval candles In CandleScanner you can switch the time interval in two ways e Using the time interval buttons e Using the combo box with user defined intervals oh Please note that in CandleScanner End of Day EOD edition it is not possible to display a chart in intraday mode 3 2 Long and short lines Candles differ in length which is shown in the division of the candle The criterion for this division is fluid and depends on the current situation on the chart The so called short fine is the one where the market volatility is very low small price range Simila
37. an be docked placed The Container for tool windows can contain only tool windows However the document container can contain both namely the document and tool windows This means for example that the Symbols window which is of type tool window can be docked in the documents container along with other documents like for example candlestick charts The reverse is not possible however For example when in CandleScanner there is a document window open with a candlestick chart and we can click on the tool window and select different symbols from the list By doing this the document window with the candlestick chart will reload the content to display data for the newly selected symbol If however the currently opened document is of a different type for example containing a candlestick patterns dictionary then clicking on the same list of symbols in the tool window would not change anything This is because not all documents have to be connected with tool windows CANDLESCANNER USER GUIDE 10 candlestick patterns dictionary is an example No matter what symbol is selected in the tool window with symbols the document with the dictionary stays the same HOME DATA VIEW Ta P la El Son F WV E RE Scanner Price Chart Recent Symbol Group Tests Quotes Patterns IBM P Gry M0 other Bars Line pyerages Bands Other Settings Patterns Statistics statistics Table Dictionary Scanner New Window Active Symbol Interval Chart Indicator
38. andle o doji body above prior close o doji low below prior high third candle black body body below the prior body closing below the midpoint of the body from the first day CANDLESCANNER USER GUIDE 72 Pattern one line Description Name Morning Doji Star Japanese name ake no myojyo doji bike Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Evening Doji Star Name Evening Star Japanese name sankawa yoi no myojyo Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Morning Star Name Morning Star Three River Morning Star Japanese name sankawa yoi no myojyo Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Evening Star Name Identical Three Crows Forecast bearish reversal Trend prior pattern uptrend Opposite pattern none Similar pattern Three Black Crows Construction e first candle o candle in a downtrend o black body second candle o doji candle o doji body below prior close o doji high above prior low third candle white body body above the prior body closing above the midpoint of the body from the first day first candle o candle in an uptrend o white body second candle o white or black body o body above prior body third candle black body body below prior body closing below the midpoint of the body from the first candle first candle o candle in a downtrend o black body
39. ates in which specified basic candle occurred Tab uses the same approach as the one dedicated to patterns see chapter 5 1 1 5 1 6 Report tab Report tab is summarising statistics for a given symbol Data Range From 1 3 2000 To 11 21 2014 Time Interval days 1 Number of Candles 3 779 Number of Found Patterns All 727 Bullish reversal 267 Bearish reversal 355 Bullish continuation 52 Bearish continuation 53 1 line 147 2 lines 493 3 lines 87 4 lines 0 5 lines 0 Figure 5 6 Report tab of the symbol s statistics module 5 2 Group statistics Group statistics calculates as the name implies statistics for the whole group of symbols It allows one to look at a particular group of symbols from a broader perspective To create a group statistics click Group Statistics from the HOME menu Then pop up window appears in which you need to specify the following e Date range for which statistics will be calculated e Group for which statistics will be calculated e Candlesticks time interval that should be used For example having 1 minute quotes data you can calculate statistics for any time interval equal or bigger than 1 minute mM Please note that the more symbols you have in a group and the longer date range is for which statistics needs to be calculated the longer the whole process will take CANDLESCANNER USER GUIDE 45 o _ CandleScanner _ HOME DATA VIEW e gt J A aE e
40. ber and Percent button from the STATISTICS menu CANDLESCANNER USER GUIDE 46 CandleScanner Sla x HOME DATA STATISTICS a All Available Quotes TH Pattern Type All gt 12 Number From 44 2000 y Sten To 1 16 2013 Statistics Basic Candlestick v Range Candle Pattern Filter Data DAX30 StatGr 1d zo ORG AX Stat 1d s ADS DE Tab 1d s ADS DE 1d 2 gt x Patterns Occurrences Patterns Efficiency Patterns Efficiency Within Group Symbols by Pattern Type Patterns Efficiency Within Group Symbols by Pattern BasicC 4 D Y EOD EOD UM False forecast E Low efficiency 1 3 bars Candles Numberof Average o Medium efficiency 4 6 bars WB High efficiency 7 10 bars Occurrences _ Frequency SAP DE 3 763 878 43 CBKDE 3 814 872 44 DALDE 3 761 842 45 ALV DE 3 762 835 45 TKA DE 3 787 833 45 Figure 5 8 Patterns Efficiency Within Group Symbols by Pattern Type tab of the groups s statistics module 5 2 4 Basic Efficiency Within Group Symbols by Pattern tab In this tab you can see an efficiency of all symbols from the group for a specific pattern e g Bullish Engulfing i O CandleScanner 2 FILE HOME DATA STATISTICS a Pattern Type 12 Number All Available Quotes He From 1 1 2000 Pattern Bullish Engulfing B Calculate To 1 16 2013 Statistics Basic Candlestick X Candle Pattern Filter Data DAX30 StatGr 1d z ORG AX Stat 1d s A
41. button to select multiple rows at once 2 Press Next gt button STEP 3 1 Specify in which symbols group you want to store the imported symbols You can either select one from the already existing groups option Existing group or create a new one option New group Note that if you specify a group it has to be of the same type i e z raday or EOD as the data which is being imported 2 Press Next gt button STEP 4 skipped if import schema was selected in STEP 1 1 Assign to each column an appropriate data type Application displays first rows of the file split into columns to make the process easier Right click on every column and select the data type 2 Press Next gt button STEP 5 1 The importing process is completed You can save current import settings as an port schema and use them next time to optimize the import process If any problems were encountered during the import you will see details in the lower panel of this screen 2 Press Finish button 2 2 6 Using the CandleQuote application as a data source CandleQuote is an application which can be combined with CandleScanner to get free data quotes using YAHOO Finance service You can buy it on CandleS canner website First you use CandleQuote application to download data quotes which are interesting for you Then you export data quotes to a text file ASCII file in CSV format This data is compatible with any trading tool supporting EOD ASCII files
42. d as short lines Figure 3 4 illustrates the process of determining the short and a long line Red lines designate the average range of volatility for the last 25 candles The green line in the middle indicates 70 percent of the range between red lines Each candle located below this threshold is classified as a short line and marked with the orange color Dark blue and red candles will be discussed later The parameter value of 70 percent was arbitrarily chosen Normally this depends on personal preference and CandleScanner allows the user to change this to meet specific requirements Nevertheless it is good to remember that the more we increase this parameter the more short lines we will have and vice versa when we lower the value there will be more long lines This also has an impact on the number of identified candle patterns found by CandleScanner Despite the discretion we should remember that the optimal range is somewhere between 65 and 80 percent of the span 3 3 Basic candles Given the requirement for information on four prices OHLC in order to construct a candle the resulting candle shapes can take on a variety of forms The body may be very long or very short and similarly for shadows However esther the body or the shadows may sometimes not appear at all This multitude of combinations allows a grouping the candles based on their appearance enabling them to be interpreted All the individual candles are called basic candles Mos
43. d of day for daily quotes Groups of type EOD cannot store symbols of type 2ntrada AD Intraday symbols can be stored in the same group even if they have a different base time interval i e the time in which prices are quoted for the given symbol in the file For example you can put to the same intraday group 15 minutes EUR USD and 1 minute EUR CHF However it is recommended to avoid this practice and create separate groups for every base time interval Organising symbols this way introduces clarity especially when if comes to the calculation of statistics for the whole group for more details please go to Group statistics section 2 2 4 Importing MetaStock data quotes To import data into CandleScanner from Metastock files click the Import Metastock button from the DATA menu on the ribbon bar This opens the Metastock Data Import Wizard which guides you through the whole process There are 4 steps within this wizard If you need you can use the lt Back button to return to the previous step STEP 1 1 Specify the folder on your computer where the Metastock files are stored by clicking the button beside the Select folder containing Metastcok data text field CANDLESCANNER USER GUIDE i STEP 2 STEP 3 STEP 4 2 2 5 Select checkbox Automatic quote update if you would like CandleScanner to read the directory from which you are importing to for more see Automatic quotes update in this chapter Press Next gt bu
44. d this period on occasions During this period you are informed about the estimated time and current progress on the issue 1 2 Editions of CandleScanner Currently as of this writing there are two editions of CandleScanner available and one planned to be released in 2015 e End of Day Edition e Intraday Edition e Real Time The following Table summarizes differences between the CandleScanner editions End of Day Intraday Real Time reaiure Edition Edition Edition End of day EOD charting back testing scanning Intraday n minutes n hours charting back testing scanning Algorithms detecting 84 Japanese candle patterns Statistics Module Back testing module Real time scanning and alerting Real time data quotes support from IQFeed Real time data quotes support from eSignal Version expected for sale in Q2 2015 1 3 Technical requirements 1 3 1 Software requirements In order to successfully run and use the CandleScanner application you need to have a computer with one of the following operating systems e Windows XP e Windows Vista e Windows 7 e Windows 8 e Windows 8 1 CANDLESCANNER USER GUIDE J Both versions are supported 32 bit and 64 bit Additionally you need to have NET Framework 4 0 or above installed on your computer If this is not the case please visit Microsoft website to download it and install it first on your machine prior installing CandleScanner 1 5 2 Hardware requ
45. de by Side White Lanes Evening Star Three White Soldiers Bearish Tri Star Identical Three Crows Two Crows Bullish Abandoned Baby Morning Dog Star Unique Three River Bottom Bullish Side by Side White Lines Morning Star Upside Gap Three Methods Bultish Tri Star Three Black Crows Upside Gap Two Crows Collapsing Doji Star Three Inside Down Upside Tasuki Gap Deliberation Three Inside Up Downside Gap Three Methods Three Outside Down e Four line patterns 3 in total Concealing Baby Swallow Bearish Three Line Strike Bullish Three Line Strike e Five line patterns 7 in total Bearish Breakaway Ladder Bottom Rising Three Methods Bullish Breakaway Ladder Top Falling Three Methods Mat Hold In Appendix A Supported candle patterns you can find detailed descriptions of every single pattern In CandleScanner you can also use Patterns Dictionary available from the HOME New Window menu as a quick reference a The Turn Up and Turn Down patterns were discovered by the CandleScanner team during the development of the software They are included in the list of supported patterns due to their good efficiency and high frequency which makes them potentially attractive for traders 4 2 Displaying patterns on the chart Scanning for candlestick patterns in CandleScanner is automatic This means that once you load data into CandleScanner and display the symbol on the price chart you immediately see the found patterns for the specific symbol The list of patterns is u
46. ded candles can create a single stronger signal Secondly by blending candles you eliminate market noise thereby getting a more accurate reflection of the underlying activity Finally continually watching individual candles play out over short time periods creates stress which can and frequently does result in prematurely stopping out exiting positions this can result in losses or less profit taking than originally targeted The importance of the last point cannot be understated The psychological aspect reacting to short term patterns plagues most investors Analysing groups of blended candles enables us to keep a focus on our trading plan thereby restraining the emotional reaction arising from adverse short term price movements In other words it helps us not to get caught up CANDLESCANNER USER GUIDE 26 in the noise and to stick to our original trading plan waiting for stops or targets to be reached as set at the beginning of the trade So how does blending work Very simply first we decide how many candles we would like to blend take the opening price of the first candle the highest and lowest prices achieved across all candles and finally the closing price of the last candle Using CandleScanner you are able to blend as many candles as you like Figure 3 2 show the position for two candles We have a down period with a relatively large body for the first candle followed by a period with a larger body which fully engulfs at the
47. dle o candle in an uptrend white candle e second candle Name Bullish Three Line Strike o white candle O open within the prior body o close above the prior close e third candle o white candle open within the prior body Strike o close above the prior close Japanese name santeuchi Forecast bullish continuation Trend prior pattern uptrend Opposite pattern Bearish Three Line e fourth candle o black candle O open above the prior close o close below the first candle s open A 6 Five line patterns Pattern Construction one line Description first candle o white candle appears as a Jong line second candle o low above the prior high o white candle third candle o white or black candle O open above the prior open Name Bearish Breakaway Japanese name hanare sante no shinnzukae fourth candle Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Bullish Breakaway white candle o close above the prior close fifth candle o black candle appears as a Jong line o open below the prior close o close below the second candle s open but above the first candle s close gap from the second candle is not closed CANDLESCANNER USER GUIDE 77 Pattern one line Description Construction first candle o black candle appears as a Jong line second candle o high below the prior low o black candle third candle o whi
48. dle in a downtrend o black body O price gaps lower from the prior candle second candle black body opening below prior open price but not lower than low price closing below prior close price CANDLESCANNER USER GUIDE 69 A 4 Three line patterns Pattern one line Description Name Bearish Abandoned Baby Japanese name sute go Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Bullish Abandoned Baby Name Bullish Abandoned Baby Japanese name sute go Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Bearish Abandoned Baby Name Advance Block Japanese name sakizumari Forecast bearish reversal Trend prior pattern uptrend Opposite candlestick none Similar pattern Deliberation Name Collapsing Doji Star Forecast bearish reversal Trend prior pattern uptrend Opposite pattern none Construction first candle o candle in an uptrend o white body second candle o doji candle o low above the prior high third candle o black body o high below the prior low first candle o candle in a downtrend o black body second candle o doji candle o high below the prior low third candle o white body o low above the prior high first candle o candle in an uptrend o white body second candle o white body O opening within the previous body o closing above the prior close price third candle o white body O opening
49. e ATIC CONCEDA E T A E 25 SL Canadesi ck conor AO 0 25 DAG Pye tech candiles ina 26 io SAD a A ore rery tore tre rere ere rerarre rr ryrrerer rer rer ster ver EE rer aver rer gett ett tent ornate 28 SO A NU A 30 JA Candle qa dtoteatopenand Close PASS sediento 31 i ie A tin 31 se GS MENS 6100 O A OS 31 r DO cmd naaa 31 3 4 Candlestick charts CandleScanner color theme 92 Oe an Ae ree SAR Ue oO EP E de cs de io do lo 33 caminos candlestick DATICINS 4 seen a 35 AA Supported candlesticle DATES A terrestre 35 4 APS pateras o E AE arae ae de a a ao 36 ad eco A E E E R 36 4 2 2 Synchronization between the list of found patterns and the price COn iii 37 Mor NATTA nino e EE a E E A E A E A N E E E af ko o AA ee ed nd ane 37 43 1 Checking the list of the mostrec ntpati ems tor recently Used symbo lg st of 432 Checking the list of the most recent patterns Tor the group Of symbols 38 BT NI IN PRA uu nO EE E O EE 38 45 Practical recommendations on using Candles Cane rra 39 AOA CAREC anly Tie reste Pater rs arlene 39 4 5 2 Scanning speed atid some performance TECOMMENCATONS sisiscicac caritas rra 39 NY OPI ACA Stats ES cee S E 41 DL ODO SAO ete ne ete ee ee eee Na 41 EN Patterns ANG circo Ud 42 ao Pareri Erin CA agata ia 43 o Parier PAC D S EEEE E NEA 44 D Pareri Olecurrences by Date be aie cs bonne ne lie 44 Dil Dasic Candles Iccutreaces aiii 45 E Ac 010 Gg EEE 45 A no Ao 45 Se ME rn PPP no E y 46 Sa PAPE OA oo O O e ee
50. e body opening matches the prior open price CANDLESCANNER USER GUIDE 67 Pattern one line Description Name Bearish Tasuki Line Japanese name tasuki Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Bullish Tasuki Line See Also Downside Tasuki Gap Downside Gap Three Methods Name Bullish Tasuki Line Japanese name tasuki Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Bullish Tasuki Line See Also Upside Tasuki Gap Upside Gap Three Methods Name Thrusting Japanese name sashikomi Forecast bearish continuation Trend prior pattern downtrend Opposite pattern none Name Turn Down Forecast bullish reversal Trend prior pattern uptrend Opposite pattern Turn Up Name Turn Up Forecast bearish reversal Trend prior pattern downtrend Opposite pattern Turn Down Construction first candle o candle in an uptrend o white body o low below prior high second candle o black body O opening below or at close price from the first candle o closing below prior open price first candle o candle in a downtrend o black body o high above prior low second candle o white body O opening below or at close price from the first candle o closing above prior open price first candle o candle in a downtrend o black body o high above prior low second candle o white body O opening below prior low o closing above prior close
51. e full list of supported candlestick patterns e Basic candles 19 in total Black Candle Gravestone Doji Short Black Candle Black Marubozu High Wave Short White Candle Black Spinning Top Long Black Candle White Candle Closing Black Marubozu Long White Candle White Marubozu Closing White Marubozu Long Legged Doji White Spinning Top Dragonfly Dot Opening Black Marubozu Four Price Doji Opening White Maruboxu e One line patterns 10 in total Bearish Belt Hold Hammer Southern Doji Bullish Belt Hold Hanging Man Takuri Line Gapping Down Doji Northern Doji Gapping Up Doi One Candle Shooting Star e Two line patterns 36 in total Bearish Doji Star Bullish Separating Lanes Matching High Bearish Engulfing Bullish Tasuki Line Matching Low Bearish Harami Dark Cloud Cover On Neck Bearish Harami Cross Descending Hawk Piercing Bearish Meeting Lines Falling Window Raising Window Bearish Separating Lines Homing Pigeon Thrusting Bearish Tasuki Line In Neck Turn Down Bullish Doji Star Inverted Hammer Turn Up Bullish Engulfing Kicking Down Bearish Kicking Tweezers Bottom CANDLESCANNER USER GUIDE JO Bullish Harami Kicking Up Bullish Kicking Tweezers Top Bullish Harami Cross Last Engulfing Bottom Two Black Gapping Candles Bullish Meeting Lines Last Engulfing Top Two Candle Shooting Star e Three line patterns 28 in total Advance Block Downside Tasuki Gap Three Outside Up Bearish Abandoned Baby Evening Doy Star Three Stars in the South Bearish Si
52. e larger than any of the shadows appears as a short line if none of the shadows exceed three times the body it is allowed for the candle to be a long line white body at least one shadow required body cannot be larger than any of the shadows appears as a short line if none of the shadows exceed three times the body it is allowed for the candle to be a long line CANDLESCANNER USER GUIDE 58 A 2 One line patterns Pattern one line Description Name Bearish Belt Hold Japanese name yorikiri Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Bullish Belt Hold Name Bullish Belt Hold Japanese name yorikiri Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Bearish Belt Hold Name Gapping Down Doji Forecast bearish continuation Opposite pattern Gapping Up Doji Name Gapping Up Doii Forecast bullish continuation Opposite pattern Gapping Down Doji Construction black body lack of upper shadow small lower shadow appears as a long line white body lack of lower shadow small upper shadow appears as a long line doji candle with the exception of Four Price Dojt high price below the low price of the preceding day 1 e there is a gap the preceding day cannot be a Four Price Doji doji candle with the exception of Four Price Dojt low price above the high price of the preceding day 1 e there is a gap the preceding
53. e line Description Name Bearish Meeting Lines Japanese name deaisen Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Bullish Meeting Lines Name Bullish Meeting Lines Japanese name deaisen Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Bearish Meeting Lines Name In Neck Japanese name atekubi Forecast bearish continuation Trend prior pattern downtrend Opposite pattern none Name Bearish Separating Lines Japanese name iki chigai sen Forecast bearish continuation Trend prior pattern downtrend Opposite pattern Bullish Separating Lines Name Bullish Separating Lines Japanese name iki chigai sen Forecast bullish continuation Trend prior pattern uptrend Opposite pattern Bearish Separating Lines Construction first candle o candle in an uptrend o white body second candle o black body o closing equals the open price from the first candle first candle o candle in a downtrend o black body second candle o white body o closing equals the close price from the first candle first candle o candle in a downtrend o black body second candle white candle open below the close of the first candle closing matches the prior low first candle o candle in a downtrend o white body second candle o black body opening matches the prior open price first candle o candle in an uptrend o black body second candle o whit
54. ed rectangles Tool windows can be docked on the document window container but the opposite is not possible The blue rectangle is used for auto hiding tool windows CANDLESCANNER USER GUIDE 12 2 1 2 Arranging docking windows A tool tab strip container can include one or more tool windows You can drag a tool window in the following ways e Within a tool tab strip e From one tool tab strip to another existing tool tab strip e From one tool tab strip to a new tool tab strip e From a tool tab strip on a form to a floating tool tab strip e From a floating tool tab strip to a docked tool tab strip To move a tool window drag its title bar from the source location to the new target or host container The docking assistant for details see the subsection Docking windows assistant allows you to place the tool window in a specific relationship to the other panels In addition to moving tool window in different tool tab strip containers you can use the context menu or pz icon in the dock panel title bar to make window auto hidden This mode collapses the window against an edge of the CandleScanner Another option is to move a tool window to a container with tabbed documents Both of these options e Save critical space on the end user screen e Allow more information to be presented at run time e Allow the end user to customize their work space Another aspect is resizing of the panel To resize a tool tab strip document tab strip
55. el within chart document Every panel is managed separately therefore if you want to edit RSI from the second panel you need to right click on this panel exactly to see it on the list under Edit menu item CANDLESCANNER USER GUIDE 54 Appendix A Supported candle patterns This appendix lists all the patterns which can be recognized by CandleScanner The list contains all publicly known patterns plus two patterns introduced for the first time in CandleScanner namely Turn Up and Turn Down A 1 Basic candles Pattern basic candle Description Name Black Candle Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick White Candle Name Short Black Candle Forecast reversal or continuation of the trend Trend prior to the pattern n a Opposite candlestick Short White Candle Name Short White Candle Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick Short Black Candle Name White Candle Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick Black Candle Construction black body required lower and upper shadow none of the shadows can be larger than the body appears as a long line black body required lower and upper shadow none of the shadows can be larger than the body appears as a short line white body required lower and upper shadow none of the shad
56. endency to see patterns where there are none in random data For example the very successful trader William Eckhardt in the Jack Schwager book The New Market Wizards says that we as human beings don t look at data neutrally That is when the human eye scans a chart it doesn t give all the data points equal weight Instead there is a tendency to focus on certain outstanding cases and to form opinions on the basis of these special cases That s why when Eckhardt has an insight based on a chart pattern he tries to reduce it to an algorithm that can be tested on a computer In order to investigate whether or not the insight has any value it should be explicitly formulated tested and evaluated In this regard an objective assessment has a lower chance of being biased which is crucial when making trading decisions The application of CandleScanner is extremely versatile and can be used by a whole spectrum of traders involved in for example stock market trading commodities markets futures markets or forex Also those who are just beginners will find CandleScanner a great learning and training tool where they can learn from real life data based examples rather than just pure text book theory So what can the CandleScanner application achieve With the application you can do the following e Quickly scan candlestick charts to find all occurrences of candle patterns e Measure the efficiency of patterns i e are the
57. following checkboxes Chart With List and List With Chart Both checkboxes are available in the VIEW Synchronization menu 4 2 3 Highlighting patterns on the chart You can highlight pattern occurrences without clicking on the items on the list of found patterns There are three options available on the ribbon bar from the VIEW Pattern Highlighting menu e Bullish Highlights all bullish patterns both bullish reversal and bullish continuation By default patterns from this group are highlighted by a greenish background e Bearish Highlights all bearish patterns both bearish reversal and bearish continuation By default patterns from this group are highlighted by a reddish background e Conflicting Highlights all conflicting patterns 1 e the cases where bullish and bearish patterns occurs at the same time By default such situations are indicated by a white background Every single group of patterns 1 e bullish bearish or conflicting can be highlighted by any other color To modify this please click Style Edition button from the VIEW Style menu When the mouse is hovered over the highlighted pattern a tooltip is displayed with the full name of the pattern 4 3 Recent patterns 4 3 1 Checking the list of the most recent patterns for recently used symbols When the symbol is opened in the Price Chart window for the first time CandleScanner will perform a full scan for a specified time interval in which the symbol is disp
58. ges respond faster to recent price changes than does the simple average It is generally the case that the trend is downward if the prices candlesticks are below the calculated average line and the trend is upward if they are above it Trend is very important in terms of the candle patterns Every candle pattern is anticipating either a continuation of the current trend or its reversal There are essentially the following types of candle patterns in terms of the price trend e bullish reversal patterns reversing downtrend into an uptrend e bullish continuation patterns continuation of uptrend e bearish reversal patterns reversing uptrend into downtrend e bearish continuation patterns continuation of downtrend In CandleScanner the user can set the following parameters related to price trend e the period number of candles of the moving average used as a trend indicator e the type of average used as a trend indicator e how long the required trend needs to last in order to consider established candle pattern as valid All the above parameters have an impact on the number of candle patterns found by CandleScanner CANDLESCANNER USER GUIDE Le AT amp T Inc 30 00 29 00 Rejected Engulfing Bearish pattern lack of three days up trend 28 00 27 00 26 00 25 00 24 00 23 00 22 00 21 00 20 00 19 00 Aug 26 Sep 10 Sep 24 Oct 8 Oct 22 Nov 5 Nov 19 Dec 4 Dec 18 2002 2002 2002 2002 2002 2002 2002 2002 2002
59. h can be used for the given symbol For example having imported the quotes for EUR USD symbol expressed in 15 minute time interval allows one to plot the chart as a 15 minute chart or any multiple of 15 minutes e g 30 minutes hourly daily With the base time interval equal to 15 minutes you cannot however plot the chart made of 20 minutes candlesticks In order to speed up your scanning you should store only the data set which is really needed and relevant to your trading For example if you are trading stocks using daily candlestick charts it is far better to use the data set with daily quotes rather than an intraday data set plotted to a daily chart In this case even a data set made up of 10 000 daily quotes allows the plotting of charts for the last 40 50 years which is most probably even more than you need Even so such data sets are still relatively very small for CandleScanner and can be quickly processed Another factor which has an impact on scanning speed is the number of patterns which you are looking for CandleScanner supports 86 patterns excluding the basic candles But most probably a greater number of them are not that interesting due to their very low frequency of occurrence and hence low statistical significance It is recommended to exclude from CANDLESCANNER USER GUIDE 39 scanning those patterns which are not interesting As an example of a good filter for patterns to scan you can use the 8 p g p 8 p gt y fo
60. hootin 169 474 Caterpillar Turn Up 150 421 Cisco Systems 1 Tweezers Top 137 384 Chevron Pa Turn Down 133 373 DuPont A Tweezers Bottom 117 328 Walt Disney Three Inside Down 3 20 General Electric Er Three Inside Up 109 3 06 Goldman Sachs s Northern Doji 84 235 Properties LS SS ana Copyright 2011 201 ts reserved E se yrig e Up 75 210 SMA V 10 231 Symbol name IBM i 7 28 2014 Last Engulfing Top 1962 01 02 7 16 2014 Rising Window 7 15 2014 Tasuki Line a 6 27 2014 Engulfing att 6 26 2014 Hammer LILLE LETTE 6723 2018 Harami q 00 Number of symbols in group 30 Figure 2 6 Floating window This can be helpful when we want to use CandleScanner on more than one monitor 2 1 5 Auto hiding windows If you want the tool window to auto hide un pin the tool window by clicking the pushpin icon in the title bar This will cause the window to auto hide at the edge of the container to which it belongs The screen shots below show the situation before and after un pinning the panel HOME DATA VIEW 2 R MSE A pes id hV E RE Scanner Price Chart Recent Symbol Group Tests Quotes Patterns m L Other Bars Line Averages Bands Other Settings Patterns Statistics statistics Table Dictionary tea y y Scanner New Window Active Symbol Interval Chart Indicators Groups AOS PFE 1d s3 SMA C 10 28 98 Forex Precious Metals World Stock Indexes Walt Disney Ge
61. in factors which have the biggest impact on the speed of CandleScanner e Number of quotes per symbol in a given time interval i e number of candlesticks per symbol on the chart e Number of patterns which are looked for e Number of all symbols loaded into CandleScanner across all symbol groups cP The maximum number of candlesticks quotes for one symbol in CandleScanner cannot exceed 500 000 half million Using however such large data sets is not recommended due to performance issues should all quotes be plotted on the chart or used for statistics calculations Smaller data sets should be sufficient in most cases For example a data set containing 100 000 quotes is equivalent fo some 500 years of daily prices or 2 years of hourly prices The currently used time interval is important as it comes to the speed of scanning The factor which does not always matter is the total number of quotes candlesticks in the base interval For example if there is a symbol with 500 000 1 minute quotes base interval displayed in a daily mode c a 347 days in this case it will be faster than the ten times smaller data set made up of 50 000 1 minute quotes base interval displayed in 1 minute mode c a 34 days Simply in the first case although the a data set consists of 500 000 quotes it is scanned as if there were only 347 quotes because it is presented in daily time intervals Gp Base time interval of the symbol is the minimal time interval whic
62. irements To run CandleScanner your computer needs to have as minimum the following parameters e Processor 1 GHz or faster x86 bit or x64 bit with SSE2 e Memory 1 GB RAM 32 bit or 2 GB RAM 64 bit e Hard disk 300 MB available disk space e Display 1366 x 768 screen resolution 1 4 Purchasing and installation process 1 41 Licensing policy Once the application is bought the user has the following benefits e One time fee for using the application lifetime without any limits e Free updates for the first year since purchase e Free technical support for one year since purchase All licenses are for one computer only If you need to use the application on more than one computer please contact us at contact candlescanner com for discount s D Activation of the licences is an automatic process during the installation process Active internet connection is required because the security keys are retrieved from the remote license server CandleScanner will not work as a full version without these keys Please do not distribute to anyone your user name and or password which are used during the registration process Every connection to the remote server is registered and if we notice any form of abuse e g multiple license registrations under the same user credentials we reserve the right to permanently revoke the license without any warning 1 4 2 Purchasing process All payments are made via PayPal service The whole proces
63. is at least 3 times larger than the body Opposite candlestick none CANDLESCANNER USER GUIDE 56 Pattern basic candle Description Name Long Black Candle Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick Long White Candle Name Long White Candle Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick Long Black Candle Name Black Marubozu Japanese name marubozu bozu Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick White Marubozu Name Closing Black Marubozu Japanese name yasunebike Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick Closing White Marubozu Name Closing White Marubozu Japanese name marubozu bozu Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick Closing Black Marubozu Construction e black body e required upper and lower shadow e none of the shadows can be larger than the body body three times bigger than the average body of the last 5 or 10 candles appears as a ong line white body required upper and lower shadow none of the shadows can be larger than the body body three times bigger than the average body of the last 5 or 10 candles appears as a long line black body lack of shadows appears as short and long
64. isting themes There are also built in themes which can be used as templates for the new themes created by the user Built in themes cannot be modified 1 e when you modify anything within a built in template you can only save it as a new theme All built in themes can be distinguished from user created themes as they have in their name built in at the end Users can easily change the current theme by clicking on the Style Edition button When the theme is selected the change is immediately visible in the background so the user does not have to go back and forth to see how the new theme looks in the application When the user is editing the theme most of the changes will be immediately visible in the background Thanks to this the user does not have to save and close the edit window in order to see the changes CANDLESCANNER USER GUIDE zg 2 3 3 Chart zooming CandleScanner allows to increase or decrease the number of quotes e g candlesticks in case of using candlestick chart visible on the screen To zoom in use the button representing magnifying glass with plus sign in the bottom right corner of the application To zoom out use the button with a minus sign Please note that using a big number of candles on the screen e g more than 250 candles per screen slows down the application The more candles are visible the more time CandleScanner needs to calculate and plot all details HOME DATA VIEW BACKTEST E M 2 an LE A _F Soe
65. l if there was uptrend before Construction first candle o candle in an uptrend o white body second candle o doji candle o body above the body of the first candle first candle o candle in a downtrend o black body second candle o doji candle o body below the body of the first candle first candle o candle in an uptrend o white body second candle o black candle o black body overlaps the white candle s body first candle o candle in a downtrend o black body second candle o white candle o white body overlaps the black candle s body first candle o candle in a downtrend or closing below the trendline o any basic candle except Four Price Doji second candle o any basic candle except Four Price Doji o high below the prior low CANDLESCANNER USER GUIDE 63 Pattern one line Description Name Rising Window Forecast bullish continuation Trend prior pattern uptrend Opposite pattern Falling Window Remark pattern is bearish reversal if there was downtrend before Name Bearish Harami Japanese name harami Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Bullish Harami Extended pattern Three Inside Down Name Bullish Harami Japanese name harami Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Bearish Harami Extended pattern Three Inside Up Name Bearish Harami Cross Japanese name harami yose sen Forecast bea
66. lative to the primary host container The inner zone has a center compass with icons for positioning a window in the underlying docking container or in another docking container relative to the underlying one All of these icons represent a drop target 1 e the destination for the window you are moving CANDLESCANNER USER GUIDE 13 To use the docking windows assistant use the mouse to select the title bar of the source window Drag the window over the host destination container This action activates the docking windows assistant Point to the inner or outer zone icon that represents the area you want the window to occupy When the mouse button is released the window is relocated Other windows in the host container as well as other docking containers within the application are relocated to accommodate the change In addition to the drop target icons the docking assistant displays docking hints A docking hint is a visual preview of what space will be occupied by a window Drop hints are enabled when you are in the process of moving the window and while the mouse pointer is positioned over one of the drop targets d o A t 7x RA aio lr Fock ERE v OS X m Scanner Price Chart Recent Symbol Group Tests Quotes Patterns Dis w M LE Othe Candlesticks Bars Line Awerages Bands Other Settings Patterns Statistics statistics Table Dictionary 1 Le gt gt gt Scanner New Window Active Symbol Interval Chart Indicators
67. layed on the chart 10 of the most recent patterns found on the chart are then added to the Recent Patterns list If the time interval is changed CandleScanner will perform the full scan again for the new time interval and 10 new most recent patterns are added CANDLESCANNER USER GUIDE 37 Gp Recent Patterns contains 10 of the most recent patterns for a given symbol in a given time interval Therefore if you open some symbol in daily time intervals and then you switch into hourly time interval the Recent Patterns list will have 20 patterns in total 10 for daily quotes and 10 for hourly quotes 4 3 2 Checking the list of the most recent patterns for the group of symbols If you want to see the most recent patterns for all symbols in the group you can do this by going to the Group Statistics in HOME New Window menu After clicking on the button you need to specify the group of symbols and the time interval over which the patterns will be searched Then all symbols for the specified group are scanned and the 10 most recent pattern occurrences for every symbol are added to the Recent Patterns list 4 4 Scanner settings CandleScanner allows for the definition of more than one scanning profile Only one profile can be used at a time but the user can easily switch between profile if needed This can be helpful on certain occasions such as e Different settings for different markets e g stocks currencies commodities e Different setting
68. le you can put into panel 11 Stochastic YD and RSI because they share the same scale You cannot add there however in that case ATR Figure 7 1 shows all possible panels visible e price panel P e volume panel V e first indicators panel 11 e second indicators panel 12 e third indicators panel 13 Price panel is always visible cannot be closed hidden Volume panel is only available when underlying symbol contains volume data If this is the case panel can be visible or hidden All three indicators panels can be visible at any time Volume and indicators panels can be shown hidden using the ribbon bar CANDLESCANNER USER GUIDE Sl FILE HOME DATA VIEW BACKTEST t t G e M Groups il il 4 Wi Pattern Trend _ Market Data ab aes HO wih List Ka E Symbols m g 0 Volume O Pattern List y Bearish List With Chart amp 4 no Default Classic Candle Trend Volume Trend Name Conflicting Crosshair None Style Layout Scanner Edition Windows Layout Candle Appearance Chart Pattern Label Pattern Highlighting Synchronization Cursor Style V Stat 1d sz p b aic 10 105 79 SMA C 10 105 79 BBBot C 10 2 00 94 13 BBTop C 10 2 00 117 44 Price Panel a gt T A uw lt 3 S a D o a m gt m Stochastic D 15 3 9 55 67 ACD 12 26 1 86 Signal 12 26 9 0 61 3rd Indicators Panel ATA mo Vas A E 0 a Number of symbols in group 30 Figure 7 1 Candle
69. leS canner color theme All of these basic candles can be part of candlestick patterns and therefore it is important to know if we are dealing with a doji candle ot a spinning top It is easy to mix them up when a spinning top has a very small body which looks on the chart as if the open and close prices are equal 3 4 Candlestick charts CandleScanner color theme Almost all of the western literature devoted to candlesticks has simplified the analysis by limiting the candle colors to dark black and light white body According to Seiki Shimizu the colors of candles were originally much more complex which he demonstrated in the example of a doji candle in which there is only a shadow line and a line marking the opening price equal to the closing price With high price volatility over short time intervals when the price jumps for example by some 30 percent some candles can look as insignificant points on the chart The use of color immediately explains and shows the nature of the candle In CandleScanner users can display colors of their choice in the candlestick charts using the CandleScanner Color Theme The following colors can be displayed eo green ong lines e orange dark yellow short lines e blue all kinds of spinning tops e red all types of doji candles Figure 3 5 shows a candlesticks chart using the CandleScanner Color Theme This theme is optional and can be switched off if you prefer a simple candle
70. lines black body lack of lower shadow upper shadow smaller than the body appears as short ot long lines white body lack of upper shadow lower shadow smaller than the body appears as short ot long lines CANDLESCANNER USER GUIDE ar Pattern basic candle Description Name Opening Black Marubozu Japanese name yoritsuki takane Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick Opening White Marubozu Name Opening White Marubozu Japanese name marubozu bozu Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick Closing Black Marubozu Name White Marubozu Japanese name marubozu bozu Forecast reversal or continuation of the trend Trend prior pattern n a Opposite candlestick Black Marubozu Name Black Spinning Top Japanese name koma Forecast indecision Trend prior pattern n a Opposite candlestick White Spinning Top Name White Spinning Top Japanese name koma Forecast indecision Trend prior pattern n a Opposite candlestick Black Spinning Top Construction black body lack of upper shadow lower shadow smaller than the body appears as short ot long lines white body lack of lower shadow upper shadow smaller than the body appears as short ot long lines white body lack of shadows occurs on short and long lines black body at least one shadow required body cannot b
71. llowing approach 1 Make sure that all patterns are included in scanning process FILE Settings Candle Patterns 2 Calculate the statistics for the whole symbol group you are going to trade make sure to specify the right time interval 3 Open the statistics and check the patterns frequency Write down the 10 most frequent patterns as the most interesting i e those having a higher statistical significance than the very rare patterns 4 Exclude the less frequent patterns from the scanning process using Options From now on CandleScanner will be looking only for the 10 most frequent patterns thus running significantly faster than when all 86 patterns are activated for the scanning process Make sure however that this is undertaken at the individual symbol level as there can be considerable differences in pattern profiles CANDLESCANNER USER GUIDE 40 5 Working with statistics It s not enough just to know that a pattern has occurred on the candlestick chart but also how well or badly it had performed in the past In other words how effective is the signal being generated And here even before going into a heavy duty backtesting analysis we can check some simple statistics first As a first pass there s no need for detailed model optimization no need for sophisticated entry exit methodology and no need for risk and money management rules just a basic analysis of the underlying statistics What matters at this stage i
72. llowing information e Open price when the 15 minutes period begins e Close price when the 15 minutes period ends e High and low price over the 15 minutes period It is clear from this that we cannot plot 20 minute candles as we do not have the full profile of market prices as at the end of the 20 minute For this reason CandleScanner does not allow you to plot charts in such cases As described above a blended candle is a candle which combines a specified number of individual candles for some base time interval For example a daily candle 1 e the one which base interval is one day can be used to build a blended candle made up of 3 such daily candles So as a result of blending 300 daily candles we end up with a set of 100 3 daily candles CANDLESCANNER USER GUIDE 27 In CandleScanner the user can create custom time intervals to plot on the chart The following naming convention is used e misused for minutes for example 7m 1 minute 2m 2 minutes and so on e is used for hours for example 7h 1 hour 2h 2 hours and so on e disused for days for example 7d 7 day 2d 2 days and so on e wis used for weeks for example 1w 1 week 2w 2 weeks and so on e Mis used for months for example 7M 7 month 2M 2 months and so on e YY is used for years for example 1Y 7 year 2Y 2 years and so on e cis used for base time interval candles for example 7 7 candle 2c 2 candles and so on i Please note that time interv
73. n the Figure 5 10 we can notice that Black Candle basic candle occurred 1 196 times among total 11 329 candles in case of CVX symbol That means that 10 56 of all candles within CVX symbol belongs to Black Candle We can also say that on average Black Candle occurs every 9 5 days this symbol is expressed in daily candles FILE HOME DATA All Available Quotes La E From 1 1 2000 y Calculate To 1 16 2013 v Statistics Basic Candlestick Black Candle Candlestick Black Candle Percent Range Candle Pattern Filter Data up Symbols by Pattern Type STATISTICS Pattern Type v 12 Number ORG AX Stat 1d z ADS DE Tab 1d z VZ 1d a Patterns Efficiency Within Group Symbols by Pattern Basic Candles Occurrences Basic Candles Occurrences Details Info Number of Occurrences saruadog s1oqUu S sdnois Number of symbols in group 20 Figure 5 10 Basic Candles Occurrences Details tab 5 2 7 Report tab Patterns Efficiency Within Group Symbols by Pattern Basic Candles Occurrences Symbol name Adidas AG Allianz SE BASF SE Bayer AG Beiersdorf AG Bayerische Motoren Werke Aktiengesellschaft Commerzbank AG Continental AG Daimler AG Deutsche Boerse AG Deutsche Bank AG Deutsche Post AG Deutsche Telekom AG 1 2 3 4 5 6 Fi 8 9 10 11 12 13 Figure 5 11 Report tab of the groups s statistics module To day 11 21 2014 11 21 2014 11 21 2014 11 21 2014 11 21 2014 11 21 2014
74. nalysis software which is designed for investors interested in Japanese candle patterns What makes this application exceptional is that from the outset it has been specifically designed for the detection Japanese candle patterns It is not just yet another add on to some existing platform but a full blown application written by people having extensive knowledge of the topic of Japanese candlestick patterns In other words it is highly specialized and focused software It is suitable for both seasoned traders and complete beginners Figure 1 3 Screen where you can activate your license You will see this screen only once during an installation process 1 44 Starting the application Once the installation process is finished you are ready to run it You can access the application via the shortcut created either on the Windows Desktop if you selected this option during installation or from the Start menu screen CandleScanner is distributed with some built in market data in order that you can immediately start working with it This data is available in the Groups section of the Home screen The data can be removed by the user Users can of course import their own data and you can find more on this in the section Importing data quotes into Candles canner 1 4 5 Upgrading your application Whenever a newer version is available for download you can simply perform the same steps as for normal installation It is recommended you first remove
75. nd Conflicting Properties avout FETE O Edition Windows Layout Candle Appearance Chart Panels Pattern Label Pattern Highlighting Synchronization Cursor Style roups v Be IBM Stat 1d z3 DJIA StatGr 1d 3 SMA C 10 86 65 zee Pattern Type All Forex Intraday Pattern Precious Metals EOD z g 8989 All EOD Pi fos Found Patterns 3 926 Index Date Candle Pattern 10 14 2014 Homing Pigeon 10 7 2014 Turn Down 10 2 2014 Takuri Line 10 1 2014 Last Engulfing Botto 9 29 2014 Three Inside Up 9 26 2014 Harami 9 16 2014 Three Inside Up 9 15 2014 Harami Name Interval Pant ou amp WIN a Caterpillar ld Cisco Systems id DIS Stat 1d Chevron DuPont Patterns Occurrences Patterns Efficiency Pattern Efficiency Details Patterns Occurrences by Date Basic Candles Occurrences General Electric MA False forecast M Medium efficiency 4 6 bars Candie Pattern Number Goldman Sachs Low efficiency 1 3 bars MM High efficiency 7 10 bars qe The Home Depot 0 20 40 60 80 IBM Intel JPMorgan Chase 45 57 aaa Coca Cola hs i Tuerto Merck m Microsoft Harami Harami Harami Number of symbols in group 30 Figure 2 3 Anatomy of CandleScanner windows Tool windows are in green rectangles called too ab strips In the yellow rectangle there is a document window container which is divided by a sp tter bar violet line We can see two document tab strips r
76. ndleScanner It allows you to quickly find any candlestick pattern occurrences on the chart You can also adjust the scanning algorithms to meet your specific requirements 4 1 Supported candlestick patterns CandleScanner recognizes in total 103 patterns 19 basic candles and 84 candlestick patterns The following list of authors and their books had the biggest influence on how the CandleScanner scanning algorithms were implemented e Seiki Shimizu The Japanese Chart of Charts e Steve Nison Japanese Candlestick Charting Techniques e Thomas Bulkowski Encyclopedia of Candlestick Charts e Greg Morris Candlestick Charting Explained Timeless Techniques for Trading Stock and Futures The team responsible for developing CandleScanner has spent a considerable amount of time spanning several years on the analysis on comparisons and on tests between what different authors had to say on the subject of candlesticks and candlestick patterns It so happens that even between well known authors and their publications there are differences and even contradictions on how to apply and interpret candlestick patterns CandleScanner attempts to remain true to the spirit of the original Japanese formulation s Notwithstanding rather than take and implement a rigid approach the software also provides the opportunity for users to control various parameters D For more on the basics of candles please refer to the Basic candles section Here is th
77. ndlestick reversal patterns In order to obtain a detailed explanation it is necessary do a little research and consult some of the many standard books on candlesticks such as Greg Morris s Candlestick Charting Explained out in the market place The internet of course is also a very useful resource in this regard particularly with free access to the various investment educational websites of which there are many For new users we recommend further background reading in order to familiarise themselves with the subject and so gain a more insightful and fuller experience in using CandleScanner Our website will provide a facility where users can exchange information on helpful books articles and on other resources Perhaps at this point we would add a word of caution In the context of candlestick analysis the identification of candle patterns may be important but that in it self is not a sufficient condition for profitable trading Many texts on candlesticks will most often graphically show that the pattern had correctly signaled the subsequent price action and leave it at that This can give the erroneous impression that to find the pattern on the chart is all the trader needs to do in order to make a profit However by merely looking at the resulting price profile ignores important considerations such as position management and risk management A full assessment of the profitable success or otherwise of candle patterns requires back testing the
78. neral Electric Goldman Sachs The Home Depot IBM Johnson amp Johnson Properties Symbol Symbol name 7 7 2014 7 21 2014 8 4 2014 8 18 2014 9 2 2014 9 15 2014 2 23 2014 10 13 2014 E To 2014 10 14 El SMA V 10 27 08 From 7 First session date time E Number of symbols in group 30 Figure 2 7 Pinned Properties tool window marked in red rectangle Please note on the buttons available in the top right corner you can close or unpin hide the window CANDLESCANNER USER GUIDE 15 HOME DATA VIEW 32 9 l SE Ea Scanner Price Chart Recent Symbol Group Tests Quotes Patterns Settings Patterns Statistics statistics Table Dictionary New Window Y EE PFE 1d 3 Interval SMA C 10 28 98 salpadold Precious Metals World Stock Indexes Name Walt Disney General Electric Goldman Sachs The Home Depot IBM Intel Johnson amp Johnson JPMorgan Chase Coca Cola McDonald s 3M 7 7 2014 Merck Microsoft SMA V 10 27 08 Nike HOME DATA VIEW Ra p a Ta Scanner Price Chart Recent Symbol Group Tests Quotes Patterns Settings Patterns Statistics statistics Table Dictionary Scanner New Window Properties san SMA C 10 30 11 Symbol name Pfizer 1972 06 01 To 2014 10 14 Interval 1d Source date 2014 11 17 19 57 salpadold Update none 7 7 2014 SMA V 10 20 90 Number of symbols in group 30 Figure 2 9 Showing hidden tool window andleScann Be A M AO Active Symbol
79. ng of already imported data with new quotes When you select this option you can update this folder with newer data and CandleScanner automatically update without the necessity of having to go through the steps in the manual import routine For example you may have daily updates of price data from your brokerage firm You have created a folder on your computer where you store this data You import it once into CandleScanner and then periodically update this folder with newer data CandleScanner will detect the newer data Use this option if you want to periodically update the data Please note that in order to use the automatic quotes update you need to keep the folder from which you imported the data on your drive You also cannot change the name or location of this folder 2 3 Working with price chart 2 3 1 Supported price chart types CandleScanner supports three types of price charts e candlesticks chart for more see Candlestick construction e bar chart e line chart CANDLESCANNER USER GUIDE 22 e You can switch between different types of chart using buttons located on the ribbon bar at HOME Chart group see Figure 2 12 FILE HOME DATA VIEW Pi t D mn iq SE 18e Fie Ta P l AV E PTS Scanner Price Chart Recent Symbol Group Tests Quotes Patterns Gs m o E Other Bars Line Settings Patterns Statistics statistics Table Dictionary a Scanner New Window Active Symbol Interval Chart Figure 2 12 S
80. ntrend o black body second candle o white body o open and close within the body of the previous candle third candle o close above prior close first candle o candle in an uptrend o white body second candle o black body open above prior close o close below prior open third candle o close below prior close o black body CANDLESCANNER USER GUIDE 79 Pattern Description Construction one line first candle o candle in a downtrend Name Three Outside Up o black body Forecast bullish reversal second candle Trend prior pattern downtrend o white body o open below prior close Opposite pattern Three Outside Down o close above prior open See also Bullish Engulfing third candle o close above prior close o white body first candle o candle in a downtrend o black body Name Three Stars in the South o long lower shadow second candle o black body o open below prior open Trend prior pattern downtrend o close below or at the level of prior close o low above prior low third candle o Black Marubozu O appears as a short line Japanese name kyoku no santen boshi Forecast bullish reversal Opposite pattern none first candle Name Bearish Tri Star o doji candle Japanese name santen boshi second candle Forecast bearish reversal o doji candle o body above the prior body third candle o doji candle o body below the prior body Trend prior pattern uptrend Op
81. o any area within the docking assistant other than a drop target icon CandleScanner will create a new floating container with the tool window in it e Right click the title bar and select Floating from the context menu works only for the tool windows e Double click the title bar CANDLESCANNER USER GUIDE 14 To un float a tool window drag the title bar to a docked container or double click the title bar HOME DATA VIEW STATISTICS SS Rss Er AR FY Vv BRE Scanner Price Chart Recent Symbol Group Tests Quotes Patterns M Q D Other Candlesticks Bars Line Averages Bands Other Settings Patterns Statistics statistics Table Dictionary Scanner New Window Active Symbol Interval Chart Indicators Groups 7 EN IBM 20 3 IBM Stat 20 s IBM 1d sz TBM Stat id n ESS Interval Wednesday O 189 86 L 189 25 8 20 2014 G 190 10 H 190 39 Patterns Occurrences Patterns Efficiency Pattern Efficiency Details Patterns Occurrences by Date Basic Candles Occurrences CO 003 0 02 024 013 114 0 60 a neado PL SMA C10 187 85 on es Oe ON ME chark irec Py reas Candie Paikem ARETA E AAEREN E Precious Metals EOD occurrences occurrences Frequency World Stock Indexes EOD a Rising Window 321 900 414 Falling Window 285 7 99 46 6 Symbols Y s x Harami 249 6 98 534 in Harami 245 6 87 Symbol Name Engulfing 185 5 19 American Express N Engulfing 172 482 Boeing ee One Candle S
82. o close below the prior close third candle o black candle o open below the prior open Trend prior pattern downtrend o close below the prior close fourth candle o black candle open below the prior open o close below the prior close upper shadow above the prior close fifth candle o white candle open above the prior open Japanese name hashigo gaeshi Forecast bearish reversal Opposite pattern Ladder Top first candle o candle in an uptrend white candle second candle o white candle O open above the prior open Name Ladder Top o close above the prior close third candle o white candle open above the prior open Trend prior pattern uptrend o close above the prior close fourth candle Japanese name hashigo teppen Forecast bullish reversal Opposite pattern Ladder Bottom o white candle O open above the prior open o close above the prior close o lower shadow below the prior close fifth candle o black candle open below the prior open CANDLESCANNER USER GUIDE 83 Pattern Description Construction one line e first candle o candle in an uptrend white candle e second candle o black candle o close above the prior close e third candle if black candle o open below the prior open o close below the prior close Name Mat Hold if white candle o open below the prior close o close below the prior open Forecast bullish continuation o low above the prior lo
83. orecast bearish reversal Trend prior pattern uptrend Opposite pattern Inverted Hammer Name Kicking Down Bearish Kicking Japanese name keri ashi Forecast reversal or continuation of the trend Opposite pattern Kicking Up Construction e first candle o candle in a downtrend o black body e second candle o white candle o open below the close of the first candle close is into the body of the first candle but not much 10 15 e first candle o candle in a downtrend o black body e second candle o white or black candle with small body no lower shadow or shadow no longer than the body upper shadow at least 2 5 times longer than the body opening below or at close price from the first candle e first candle o candle in an uptrend o white body e second candle o white ot black candle with small body no lower shadow or shadow no longer than the body upper shadow at least 2 5 times longer than the body opening above or at close price from the first candle e first candle o white marubozu e second candle o black marubozu O opening below open price from the first candle CANDLESCANNER USER GUIDE 65 Pattern 5 Description one line P Name Kicking Up Bullish Kicking Japanese name keri ashi Forecast reversal or continuation of the trend Opposite pattern Kicking Up Name Last Engulfing Bottom Forecast bullish reversal or continuation of the downtrend Trend p
84. ous day e high price below or at the level of the trend line e the length of shadows is not important CANDLESCANNER USER GUIDE 60 Pattern one line Description Name Hammer Japanese name kanazuchi Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Hanging Man Name Hanging Man Japanese name kubitsuri Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Hammer Name One Candle Shooting Star Japanese name nagare boshi Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Two Candle Shooting Star Name Takuri Line Japanese name takuri Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Hanging Man Construction white or black candle with a small body no upper shadow or upper shadow cannot be greater than the body length of the lower shadow from two up to three times larger than the body opening or closing with the gap strengthens pattern forecast appears as a long line white or black candle with a small body no upper shadow or upper shadow cannot be greater than the body length of the lower shadow at least two times longer than the body opening or closing with the gap strengthens pattern forecast appears as a long line candle body over the trend line white or black candle with a small body no lower shadow or lower shadow cannot be greater than the body length of the u
85. ows can be larger than the body appears as a short line white body required lower and upper shadow none of the shadows can be larger than the body appears as a long line CANDLESCANNER USER GUIDE J9 Pattern E Description Construction basic candle P Name Doji Dragonfly Japanese name tonbo opening closing and high prices are the Forecast indecision same or similar Trend prior pattern n a long lower shadow Opposite candlestick Gravestone Doji Name Four Price Doji Japanese name doji a doji candle Forecast indecision all prices are equal Trend prior pattern n a lack of shadows Opposite candlestick none Name Gravestone Doji Japanese name tohbo opening closing and low prices are the Forecast indecision same or similar Trend prior pattern n a long upper shadow Opposite candlestick Doji Dragonfly Name Long Legged Doji NN doji candle Japanese name juji yose opening and closing prices are the same Forecast indecision ot similat Trend prior pattern n a upper and lower shadow very long Opposite candlestick none body is located in the middle of the candle or nearly half Related candle High Wave black or white body Name High Wave very small body Japanese name toucan nochial one or two shadows required Forecast indecision body cannot be larger than any of the had Trend prior pattern n a shadows appears as a long line if the length of the shadow
86. pdated when you switch the time interval in which you are displaying the price chart GD Importing data quotes into CandleScanner is described in the section Importing data quotes into CandleScanner 4 2 1 List of identified patterns To open a price chart for a specific symbol either right click on it and select Open in new window Price Chart or click on the button Price Chart from the HOME New Window menu ap When the symbol ts displayed in the price chart for the first time for a specific time interval the load time is longer because CandleScanner is scanning patterns on the fly Subsequent load time of the chart for this symbol will be faster as the scanning results are already saved The resulting list of identified patterns is shown to the right of the chart You can filter these by type and or by name For convenience patterns are displayed on the list in different colors for bullish and bearish patterns green and red by default CANDLESCANNER USER GUIDE 36 When any item is clicked on the list the particular pattern is indicated on the chart with the name and an arrow Location of the pattern label on the chart can be changed using mouse simply click on the label and drag and drop it to the desired location Name can be either a number using the value from the index column where all patterns are listed or the full name of the pattern You can switch between them using buttons Number and Name from the VIEW Pattern
87. posite pattern Bullish Tri Star first candle Name Bullish Tri Star o doji candle Japanese name santen boshi second candle Forecast bullish reversal o doji candle o body below the prior body third candle o doji candle o body above the prior body Trend prior pattern downtrend Opposite pattern Bearish Tri Star CANDLESCANNER USER GUIDE 76 Pattern one line Description Name Two Crows Japanese name niwa garasu Forecast bearish reversal Trend prior pattern uptrend Opposite pattern none Similar pattern Upside Gap Two Crows Name Unique Three River Bottom Japanese name sankawa soko zuka Forecast bullish reversal Trend prior pattern downtrend Opposite pattern none Name Upside Gap Two Crows Japanese name shita banare niwa garasu Forecast bearish reversal Trend prior pattern uptrend Opposite pattern none Similar pattern Two Crows Construction first candle o candle in an uptrend o white body second candle O price gap o black body o body above the prior body third candle black body open within prior body close within body from the first candle first candle o candle in a downtrend o black body second candle o black body o body within prior body o low below prior low O lower shadow at least twice longer than the body third candle o white body o body below prior body o low above the prior low first candle o candle in an uptrend o whi
88. pper shadow at least two times longer than the body opening or closing with the gap strengthens pattern forecast appears as a long line white or black candle with a small body no upper shadow or upper shadow cannot be greater than the body length of the lower shadow at least three times larger than the body opening or closing with the gap strengthens pattern forecast appears as a long line CANDLESCANNER USER GUIDE 61 A 3 Two line patterns Pattern one line Description Name Dark Cloud Cover Japanese name kabuse Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Piercing Name Piercing Japanese name kirikomi Forecast bullish reversal Trend prior pattern downtrend Opposite Dark Cloud Cover Name Descending Hawk Japanese name kakouchu no taka Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Homing Pigeon Bullish Harami Name Homing Pigeon Japanese name shita banare kobato gaeshi Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Descending Hawk Bearish Harami Construction e first candle o candle in an uptrend o white body e second candle o black body O opening above or at the high of the first candle o closing at least halfway down the body of the white candle from the first candle closing above the opening on the first candle e first candle o candle in a downtrend o bl
89. price decreased over given time interval that is the closing price is below the opening price the candle is referred to as black candle Traditionally the Japanese used black and red However nowadays it is more common to use black and white or if the candlestick is filled with color is deemed to be decreasing candlestick closing price below the opening price Alternatively if the candlestick is unfilled this indicates growth closing price above opening price Sometimes filled red candles are used to denote a bearish candle closing price below the opening price and a filled green candle denotes a bullish candle closing price above opening price In CandleScanner the user can customize the look of the candlesticks in many ways which best fit his her preferences Figure 3 1 shows the elements which make up a candle and how it is drawn depending on the relationship between the opening and closing prices 3 1 1 Blended candlesticks We can blend different adjacent candlesticks to form a single candlestick thus summarising the outcome over several periods in one candle We can blend candles of similar frequency over any time scales for example minute by minute candles hour by hour candles or day by day candles You can blend as many adjacent candles as you see fit In effect by doing this you get a clearer insight into the evolution of market activity over longer time periods Why would we want to do this Well first of all blen
90. put it back use the Unhide option S fx Indicator Hide Panel Figure 7 4 Hiding indicator on the panel D Make sure that you are clicking on the right panel within chart document Every panel is managed separately therefore if you want to hide the RSI from the second panel you need to right click on this panel exactly to see it on the list under Hide menu item 7 1 3 Removing indicators from the chart In order to remove an indicator from the chart panel right click on it and select Remove Then you will see the list with indicators which are currently on the chart HY Edit Fa Unhide Boe La BS WMA C 24 E x C4 SMAI Y L Figure 7 5 Removing indicator from the panel CANDLESCANNER USER GUIDE oo dm Make sure that you are clicking on the right panel within chart document Every panel is managed separately therefore if you want to remove RSI from the second panel you need to right click on this panel exactly to see it on the list under Delete menu item 7 1 4 Editing indicators In order to edit an indicator right click on the panel where it is located and select Edit Then you will see the list with indicators which are currently on the given panel After clicking on one of them a popup window will appear where all parameters relevant to specific indicator can be modified fx Indicators Figure 7 6 Editing indicator s parameters O Make sure that you are clicking on the right pan
91. ressed to reflect the changes Symbol Statistics window is composed of tabs Every tab presents statistics from a different perspective CANDLESCANNER USER GUIDE 4 i Statistics for a single symbol are calculated on the fly If means that when you open a new symbol statistics window its statistics is being calculated on the fly When you change a time interval let say from hourly candlesticks to daily ones statistics are also recalculated automatically The only case when user s action is necessary is when date range has been modified At that time button Calculate Statistics from the STATISTICS menu has to be pressed CC ARA A AA STATISTICS FILE HOME DATA All Available Quotes FE Pattern Type An D 12number From 1 1 2000 y Pattern no Calculate A Yo Percent To 1 15 2015 Statistics Basic Candlestick Range Candle Pattern Filter Data Patterns Occurrences Patterns Efficiency Pattern Efficiency Details Patterns Occurrences by Date Basic Candles Occurrences Info the right or on the chart directly for details Candle Pattern a y o D D Figure 5 1 STATISTICS context menu available when statistics window is opened and active From that menu you have an access to actions specific to statistics module 5 1 1 Patterns Occurrences tab FILE HOME DATA STATISTICS All Available Quotes Pattern Type All hd 12 Number From 1 1 2000
92. results based on candle signals and taking account of money and risk management This is an aspect will be covered more thoroughly on the CandleScanner website 3 1 Candlestick construction The construction of the single candlestick known also as the candle line is based on the basic data in a single time interval and consists of the following OCLH components e opening price Open e closing price Close e minimum price Low e maximum price High The time interval can be of any length spanning minutes hours days weeks months or years However if we are focused on candle patterns most traders are interested in candles made from intervals not longer than one day CANDLESCANNER USER GUIDE 25 WHITE CANDLE BLACK CANDLE AAA upper shadow lower shadow Figure 3 1 Candlestick construction It is common to find OCLH representing the order for displaying the prices open high low close The single candlestick is composed of three elements upper shadow jap uwakage lower shadow jap shitakage and body jap jittat The Candlestick body is determined by the opening and closing prices represented by a rectangle The color of the rectangle differs depending on whether the opening price is higher or lower than the closing price If the closing price is higher which means that over the time interval we had an increase in price the candle is referred to as a white candle If the
93. rior pattern downtrend Opposite pattern Last Engulfing Top See Also Bearish Engulfing Name Last Engulfing Top Forecast bearish reversal or continuation of the uptrend Trend prior pattern uptrend Opposite pattern Last Engulfing Bottom See Also Bullish Engulfing Name Matching High Japanese name niten tenjo Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Matching Low Name Matching Low Japanese name niten zoko knuki Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Matching High Construction first candle o white marubozu second candle o black marubozu o opening below open price from the first candle first candle o candle in a downtrend o white body second candle o black body o black body overlaps the white candle s body first candle o candle in an uptrend o black body second candle o white body o white body overlaps the black candle s body e both candles are Closing White Marubozu e first candle o candle in an uptrend o white body e second candle o white body O opening above the open price from the first candle o close matches the prior close e both candles are Closing Black Marubozu e first candle o candle in a downtrend o black body e second candle o black body o opening below the open price from the first candle o close matches the prior close CANDLESCANNER USER GUIDE 66 Pattern on
94. rish reversal Trend prior pattern uptrend Opposite pattern Bullish Harami Cross Name Bullish Harami Cross Japanese name harami yose sen Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Bearish Harami Cross Construction first candle o candle in an uptrend or closing above the trendline any basic candle except Four Price Doji second candle o any basic candle except Four Price Doji o low above the prior high first candle o candle in an uptrend o white body second candle o black body o body resides within the body of the first candle first candle o candle in a downtrend o black body second candle o white body o body resides within the body of the first candle first candle o candle in an uptrend o white body second candle o doji candle o high low price range resides within the body of the first candle first candle o candle in a downtrend o black body second candle o doji candle o high low price range resides within the body of the first candle CANDLESCANNER USER GUIDE 64 Pattern one line Description Name In Neck Japanese name irikubi Forecast bearish continuation Trend prior pattern downtrend Opposite pattern none Name Inverted Hammer Japanese name tohba Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Two Line Shooting Star Name Two Line Shooting Star Japanese name nagare boshi F
95. rly the ong line will be the one of high volatility high price range The short long line can be displayed in CandleScanner with different colors in order that they can readily be recognized By default the orange color is used for the short line and a green color for the long line Knowing whether a candle is a short or long line is important to correctly recognize and distinguish between the many candle patterns However to know the details how exactly CandleScanner recognizes whether we have a short or long line is not necessary especially for the less experienced users CANDLESCANNER USER GUIDE 28 Pfizer Inc 27 00 26 50 26 00 25 50 25 00 24 50 24 00 23 50 23 00 Aug 30 Sep 14 Sep 28 Oct 12 Oct 26 Nov 13 Nov 28 Dec 12 2012 2012 2012 2012 2012 2012 2012 2012 60 000 000 60 000 000 40 000 000 40 000 000 20 000 000 20 000 000 0 0 Figure 3 3 Pfizer Inc long lines green and short lines orange Candle length depends on the current volatility of the last 25 sessions which means that the green candlesticks may have very different span and still be seen as long lines Other colors used on the chart are explained in subsequent sections Please note that such a color theme is implemented in CandleScanner but the user can also switch to a simple traditional two color scheme with black and white candles or other Using more colors helps for example to accept or reject certain candle pattern as valid in
96. s Patterns Dictionary s DIS Stat 1d g DJIA StatGr ld g DIS 1d sz IBM 0d 3 IBM Tab 1d 2 Y 2 197 94 Pattern Type Date Open High Low close voul an gt T Pattern 10 14 2 184 89 185 72 183 59 183 80 3 924 10 13 2 18549 186 65 18342 183 52 3 All gt 10 10 2 185 86 187 74 185 10 185 93 5 10 9 2014 189 12 189 50 186 09 18642 2 m 10 8 2014 185 97 189 60 185 61 189 36 Assign search criteria sc A f cate EE g 10 7 2014 Falling Window 10 7 2014 187 77 188 12 185 54 185 71 2 Cisco Systems 10 1 2014 Last Engulfing B 10 6 2014 189 69 19089 18871 18904 2 9 22 2014 Evening Star Chevron 10 3 2014 188 11 189 37 187 56 188 67 DuPont 9 18 2014 Last Engulfing T Walt Disney 5 9 2 2014 Engulfing 10 2 2014 187 66 187 78 186 24 186 91 General Electric 8 29 2014 Northern Doji 10 1 2014 189 91 19040 186 79 187 17 3 70 Goldman Sachs 8 26 2014 Last Engulfing T 9 30 2014 189 64 190 85 189 15 189 83 The Home Depot 8 22 2014 One Candle Sho 9 29 2014 188 51 189 96 188 12 189 64 8 8 2014 Tweezers Botto E 8 8 2014 Harami M Found Patterns 3 567 A Index Date Candle Pattern El Johnson amp Johnson JPMorgan Chase Coca Cola McDonald s ar Click on the list on the right or on the chart directly for details Candle Pattern Number sum Average MA False forecast M medium efficiency 4 6 bars occurre occurre Frequen Low efficiency 1 3 bars High efficiency 7 10 bar
97. s Rising Window 6636 859 447 a ii iii 40 60 80 100 5211 569 4887 4685 Rising Window 1962 01 02 roe ng 2014 10 14 i 4031 Falling Window Interval 1d 3 916 Source date 2014 11 10 19 48 0 3359 3 346 Harami 3244 2759 357 DJIA StatGr 1d 3 v amp IBM Stat 1d s3 Patterns Occurrences Patterns Efficiency Patterns Efficiency Within Group Symbols by Pattern Type Pad D w Patterns Occurrences Patterns Efficiency Pattern Efficiency Details Patterns Occurrences by Date q Harami Mndata OO Enqulfinq Number of symbols in group 30 Figure 2 1 Displayed are the tool windows green rectangle and document windows red rectangle Windows from the green area can be docked in the red rectangle but the opposite is not possible i e document windows cannot be docked in the tools container Clicking on the tool window can have an impact on the content of another tool window In CandleScanner for example there is a tool window with list of symbol groups e g DJLA FTSE 100 World Stock Indexes Forex Precious Metals etc and another one with symbols belonging to the specific group Changing different symbol group from the list reloads the list of symbols and displays symbols from newly selected group This mechanism is presented in the Figure 2 2 Another difference between document windows and tool windows is in the way they can be managed within CandleScanner Because tool windows are au
98. s available at all times 2 1 8 Application themes CandleScanner can be used with different color themes to meet your personal requirements The application can be run in two different colour themes e Blue e Dark A stylish Dark look and feel is much less distracting for many people whereas B ve is very much similar to most other applications you may already are using CANDLESCANNER USER GUIDE Le rom 1962 01 02 nn SN ld 2014 11 22 15 25 19 Update lo T none Figure 2 11 CandleScanner in Dark Theme In order to change the theme navigate to File Settings General Theme Please note that in changing the application theme you are forced to reopen the application 2 2 Importing data quotes into CandleScanner In this section you will find information on the types of data formats supported by CandleScanner and how to load your data hi Supported data formats In order to import data into CandleScanner it needs to be saved in one of the following formats ASCII American Standard Code for Information Interchange text format Data files are plain text files which can be opened in any text editor e g Windows Notepad Every single line in such file contains as a minimum date and four prices open high low close which is enough to plot a candlestick on the chart Some files can also contain more data like time for intraday quotes volume or open interest futures Candle
99. s see chapter 4 4 may have a great impact on the number of identified patterns and consequently on statistics For example changing the maximum acceptable deviation of the maximum body height for doji candles may cause major impact on the number of found patterns If may happen for instance that a Hammer pattern will be identified as a doji candle and will be rejected Therefore if is recommended that any changes to the settings of the scanner are performed with a full understanding of possible consequences during the scanning process 5 1 Symbol statistics Symbol statistics calculates as the name implies statistics related only to a specific symbol This type of statistics should be used to have detailed information on the level of the gtven symbol It is very important to know that the same pattern can behave totally different between symbols To open symbol statistics click HOME Symbol Statistics from the New Window buttons group on the ribbon bar When the statistics window is opened and active a context menu called STATISTICS for statistics module will appear When you switch into another window which is not of statistics type statistics menu will disappear In the STATISTICS menu you can select the date range for which statistics is being calculated You can also specify that the statistics should be calculated for all available quotes for a given symbol After any changes to date range Calculate Statistics button needs to be p
100. s the number of accurate occurrences how statistically significant the results are and the price behavior within 10 subsequent candlesticks after the pattern s occurrence The most challenging aspect is to effectively convey the statistics and present them in such a way readily showing pattern efficiency just after its occurrence CandleScanner adopted very simple principle If there is a bullish reversal or a bullish continuation pattern on the chart the next 10 candles should demonstrate its prognostic value CandleScanner checks how many times over the next 10 candles closing prices were higher than the closing price on the candle when the pattern occurred The resulting signal value is then classified as belonging to one of the following categories e False forecast 0 candles e Low efficiency 1 3 candles e Medium efficiency 4 6 candles e High efficiency 7 10 candles Please note we are not talking about the number of consecutive candles in a row but the total number within the test period of 10 candles For example if after pattern occurrence a correct signal was subsequently confirmed on the first eighth and tenth candle it means that the candle pattern was confirmed on only 3 occasions indicating its low efficiency Of course for bearish reversal patterns or bearish continuation patterns we are looking for days with closing prices below the closing price on the candles of pattern occurrence a Please note that scanner setting
101. s for different time intervals e g 5 minute hourly daily e Different personal preferences e g a different setting for calculating the trend Scanner settings are available at HOME Scanner Scanner Settings All details are well described within the help panels on the settings window You can create more than one settings profile and easily switch between them depending on your specific needs Settings profile name default 4 Basic Settings Maximum Body Height Long Line Maximum Body Height 35 14 Allowed maximum candle body height La Trend Period measured as a percentage of full candle height body and shadows to consider candle as a valid doji candle Application i Daji Candle allows to set body height to up to 5 Pattern Validity Criteria and still consider the candle as a daji E 0 means that no deviations are Trend eee accepted i e doji candle is only when A Palen open and close are equal Bearish Patterns Long Candle Doji candle is a candle with open price equal to close price so there is no body in fact Algorithms searching for doji candles can be adjusted to accept small deviations from this rule This can be helpful while dealing with bigger candles Then very small body is dogji candle rather than spinning top candles of different opening and closing prices and having at least one shadow where the body of the candle Figure 3 2 Scanner settings window m Although scanner
102. s from this group do not use the same scale as prices For this reason it s better to plot them in a separate chart usually below the candle chart For example the RSI is an oscillating indicator ranging from 0 to100 If this indicator was superimposed on the candlestick chart for example on the EUR USD EX rate it would then flatten the candlestick pattern rendering it impossible to discern any patterns 7 1 Working with technical analysis indicators on the chart CandleScanner can open up to three panels dedicated for technical analysis indicators called 11 12 13 respectively within the chart area document at a time The top panel is reserved for a price chart it can be extended by a volume panel the remaining three panels being available for the indicators and or volume It is up to the user which panels are visible and their content On the first panel where the price chart is located you can put indicators which are from the echnical overlays group It is not possible to add on this panel other indicators to avoid problems with different scales You can add more than one technical overlay at a time to this panel For example you can put Bollinger Bands and two SMAs with different parameters On the indicators panels 11 12 13 you can put any indicator you wish either technical overlays or technical indicators Each indicators panel can be occupied by more than one indicator at a time only if they have a common scale For examp
103. s of purchasing CandleScanner is fully automated Our shop is open 24 hours a day 7 days a week Gp We encourage you to download the free trial version fully operational for 14 days to see if the application suits your expectations and needs There are no refunds in respect of purchased licenses In order to purchase CandleScanner you need to click on the BUY button from the main site at http candlescanner com under the product you want to buy Alternatively you can use the Products menu and from the page of particular product use the link navigating to our online shop In both cases you will be navigated to our online shop at http shop candlescanner com When you are on the http shop candlescanner com site you will see the basket containing product you selected before You can either proceed purchase process or add other product s to your basket To add new products you need to go to main screen of the online shop by clicking on the CandleScanner icon on top of the screen You will be then moved to the screen where you can select another product which you want to add to the basket CANDLESCANNER USER GUIDE 6 START CANDLESCANNER A lr Your Basket Your basket CandleScanner shop 1 item s technical analysis soltware Products Download Support Basket step 1 Product name Product code Quantity Unit price Delete product CandleScanner 4 End of Day CE4000 1 249 USD Discount code Summary Er ds Total amount
104. se that would mean that the candle with a small body and with very long shadows would be considered as constituting a short day indicating low volatility during the day Therefore it might be considered that this was some simplification on the part of Morris To repeat CandleScanner takes into account the whole candle height i e the body and the shadows if they exist CANDLESCANNER USER GUIDE 29 78 00 77 25 76 50 75 75 75 00 74 25 73 50 72 75 72 00 71 25 70 50 69 75 69 00 68 25 67 50 66 75 66 00 65 25 64 50 63 75 12 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Figure 3 4 Determination of the short and the ong line depending on the average price range The Green line shows 70 of price volatility for the last 25 bars We can notice that when the candle height exceeds the green line it is marked as green meaning that we are dealing with a long line All candles whose height is below the green line are marked in yellow these are short lines The Red and dark blue candles are described in section 3 3 By default CandleScanner adopts the following rule determining whether the candle is a long or a short line it sets the current range of volatility as an exponential average distance between the highest and lowest prices of individual candles for the last 25 candles A candle which spans more than 70 percent of this volatility value is regarded as a long line Candles below this threshold are regarde
105. second candle o white or black body o body below prior body third candle white body body above prior body closing above the midpoint of the body from the first candle first candle o candle in an uptrend o black body second candle o black body O opening at the previous close price third candle o black body O opening at the previous close price CANDLESCANNER USER GUIDE 13 Pattern one line Description Name Bearish Side by Side White Lines Japanese name narabi aka Forecast bearish continuation Trend prior pattern downtrend Opposite pattern Bullish Side by Side White Lines Name Bullish Side by Side White Lines Japanese name uwappanare narabi aka Forecast bullish continuation Trend prior pattern uptrend Opposite pattern Bearish Side by Side White Lines Name Three Black Crows Japanese name sanba garasu Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Three White Soldiers Construction e first candle o candle in a downtrend o black body second candle o white body o high below prior low third candle o white body o high below low from the first candle candle about the same size as the previous one first candle o candle in an uptrend o white body second candle o white body o low above prior high third candle o white body o low above high from the first candle candle about the same size as the previous one fir
106. side their containers so called floating windows dragged to other containers or collapsed and transformed to tabbed documents this is possible only for so called tool windows e The user has complete control over sizing and layout behavior e CandleScanner remembers the recent layout and restores it when starting the application CandleScanner provides the option to reset windows layout to its default settings This may be helpful especially for less experienced users who after several changes within CandleScanner windows layout may want to go back to the original settings To set CandleScanner default windows layout click VIEW Windows Layout Default Layout button on the ribbon bar Please note that your current settings of the windows layout will be lost 2 1 1 Understanding windows docking system There are two main types classes of windows within the main CandleScanner window documents windows and tool windows shown in Figure 2 1 They are used for different purposes Document windows are mainly used to present some content in CandleScanner like candlestick charts statistics or candlestick pattern dictionary Tool windows are more auxiliary in nature and in CandleScanner are used mainly to change the current content s in the document window or to change the content of other tool windows Both types have a separate types of containers within which they can be docked Gi Container are just a place in which a specific window c
107. single pattern occurrence Pattern can be changed via the Pattern list box from the STATISTICS menu This statistics is presented as a table with the following columns e Date Specifies all dates for which given pattern occurred e Blended Candle This column says what basic candle we get after blending all candles being part of a certain pattern For example if we have a Bullish Engulfing pattern built of two candles this column indicates what basic candle we have after blending these two candles If a pattern is built of only one candle this candle is used to indicate the name of basic candle e Closing Price This column specifies the closing price of the last pattern s candle e Candle number These columns represent the ten subsequent closing prices after the last pattern s candle 19 CandleScanner amp A FILE HOME DATA STATISTICS a All Available Quotes HE 12 Number From 4 1 2000 v O Calculate Yo Percent To 1 15 2015 Y Statistics ados Range Candle Pattern Filter Data Patterns Occurrences Patterns Efficiency Pattern Efficiency Details Patterns Occurrences by Date Basic Candles Occurrences Info Id Do Select Show profit loss calculated as a difference between price when the pattern occurred and 10 following candles M FTSE 100 Blended Can Pine on Candle Candle Candle Candle Candle Candle Candle Candle Candle Candle Precious Metals bise sat aussi d 2 3 4 5 6 7 8 9
108. soups ogg CVX Stat 30 a o E Patterns Dictionary Es Patterns Occurrences Patterns Efficiency Pattern Efficiency Details Patterns Occurrences by Date Basic Candies Occurrences abu Candlestick Construction Basic Candies Candle Patterns Intraday DM Foise forecast DM Medium efficiency 4 6 bars sa a Precious Metals ECO D Low efficiency 1 3 bars M High efficiency 7 10 bars pense reversal E arish reversal World Stock Indexes ECO i 7 i ri n T Bullish continuation Bearish continuation 1 line OO EE a e es Bearsh Abandoned Baby ee Bum abandones Baby q o Bearish Bet Hold i ane Si OL Bulltsh Breakaway Rising Window Collapsing Do Star me Concealing Baby Swallow Symbol y ES 2000 atc a mt esa Lt Wednesday O 62 L 56509 White Candie upper shadow 5 1 esco Cisco Systems 7 30 2014 c 8721 H 87 27 long line body 50 0 F CVX Chevron 14 10 017 05 063 118 037 Vi 7 294 200 lower shadow 44 9 So sone Pattern DD DuPont MA C 10 8624 9 ois Walt Disney 18 Found Patterns GE General Electric e 0 26 Gs Goldman Sachs 2997 i ct HD The Home Depot IBM IBM 1 10 14 2014 Homing Pigeon INTC Intel e 10 7 2014 Tum Down mu Jonnson amp Johnson lla 10 2 2014 Takuri Line JPM JPMorgan Chase 4 10 1 2014 Last Enguifing Botto KO Coca Cola a580 5 9 29 2014 Three Inside Up MCD McDonsid s Il 6 9 26 2014 Harami MMM 3M j 7 9 16 2014 Three inside Up MRK Merck T ea
109. ss gt button You can also add all symbols by clicking on the gt gt button If you want to do the opposite use lt and lt lt button respectively You can select more than one element by pressing CTRL button or SHIFT button to select multiple rows at once 2 Press Next gt button STEP 3 1 Specify in which symbols group you want to store the imported symbols You can either select one from the already existing groups option Existing group or create a new one option New group Note that if you specify a group it has to be of the same type i e ntraday or EOD as the data which is being imported 2 Press Next gt button STEP 4 1 The importing process is completed If any problems were encountered during the import you will see details in the lower panel of this screen 2 Press Finish button 2 2 7 Importing data from MetaTrader Metatrader allows to export data to external ASCII files which can be read by CandleScanner To export data from Metatrader perform following steps 1 From the menu in Metatrader select Tools Historical Center From the left panel select interesting symbol and time interval Double click on the interesting element and data will be loaded in the right panel 3 Click on the Export button to export data into an external file 4 Exported data can be loaded into CandleScanner as it is described in chapter 2 2 5 2 2 8 Automatic quotes update The Automatic quotes update simplifies updati
110. st candle o candle in an uptrend o black body second candle o black body O opening within the body of the previous candle o close below prior close third candle o black body O opening within the body of the previous candle o close below prior close CANDLESCANNER USER GUIDE 74 Pattern one line Description Name Three White Soldiers Japanese name sanpei aka sanpel Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Three Black Crows Name Three Inside Down Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Three Inside Up See also Bearish Harami Name Three Inside Up Forecast bullish reversal Trend prior pattern downtrend Opposite pattern Three Inside Down See also Bullish Harami Name Three Outside Down Forecast bearish reversal Trend prior pattern uptrend Opposite pattern Three Outside Up See also Bearish Engulfing Construction first candle o candle in a downtrend o white body second candle o white body O opening within the body of the previous candle o close above prior close third candle o white body O opening within the body of the previous candle o close above prior close first candle o candle in an uptrend o white body second candle o black body o open and close within the body of the previous candle third candle o close below prior close first candle o candle in a dow
111. sticks chart using just two colors Notice that it makes to use the CandleScanner Color Theme if you want to quickly spot the difference between short long lines and spinning tops doji candles For example some doji candles are marked in blue color rather than red as was previously mentioned This is because in fact such candles are indeed spinning tops and not doji candles but their bodies are so small that on the chart they look as if the open and close prices are the same Hence most people just looking on the chart would say that they see a doji candle although in fact it is a spinning top Again the distinction as to which exact candle we have on the chart is crucial in correctly recognizing the candle pattern CandleScanner enables the user to adjust the settings of the searching algorithms to meet specific requirements For example the CandleScanner algorithm searching for doji candles can be adjusted to accept small deviations from the strict doji definition which says that such candles do not have a body open and close prices are equal This can be helpful while dealing with larger candles We can then define in CandleScanner to accept as doji candles such cases where body length is up to 3 of the whole candle length Similarly CandleScanner allows defining the threshold for ong short lines S Shimizu The Japanese Chart of Charts Tokyo 1986 p 62 64 CANDLESCANNER USER GUIDE 32 Alcoa Inc 16 00 16 00 15 50 15 50 15
112. t The download link you can find in the email which you receive after purchase You can also navigate to the online shop at http shop candlescanner com and after signing in select the Your products item from the menu see Figure 1 2 START CANDLESCANNER v fi Your Basket Administrator s panel Your products Your orders CandleScanner shop technical analysis software Change password Products Download Support Edit your account Sign out Y My licenses Here you can download the latest versions of your applications Free updates till Product name Product code Download 2016 01 07 22 23 37 CandleQuote 2 1 CQ2100 amp Download 2016 01 05 22 40 04 930195 CandleScanner 4 End of Day CE4000 amp Download 2016 01 05 22 40 04 930195 CandleScanner 3 CS3000 amp Download 2014 CandleScanner Ordering Terms amp Conditions Blog FAQs Licensing Policy Contact Us Figure 1 2 Screen with all your purchased items After successful download of the installation file you need to run it by double clicking The process is very straightforward and does not require any specific technical knowledge from the user Simply follow the steps as they are displayed on the screen The options which can be changed by the user during installation process are the following e Location where you want to store the application on your computer e Whether the user wants or not a shortcut to be created on the desktop e Whether the user wants or not
113. t of them ate not patterns as such but they can often play an important role in the assessment of the current situation of the market CANDLESCANNER USER GUIDE 30 and its possible further development Basic candles are components of more complex patterns which can contain two three or even more basic candles Detailed construction of basic candles and candle patterns is described in the Basic candles Appendix to this User Guide It will be seen that Japanese basic candles and associated patterns can have colorful and imaginative descriptive names see section 4 1 and Appendix A 3 3 1 Candles with different open and close prices Candles with different opening and closing prices having two shadows upper and lower and with a longer body than the shadows ate denoted as follows e short white candle short line e white candle ong line e long white candle ong line e short black candle short line e black candle ong line e long black candle long line 3 3 2 Marubozu candles Candles with different opening and closing prices but not having at least one shadow are called maruboxu jap shaved head In the case when a single shadow exists the candlestick body must be longer than the shadow Marubozu candles occur both for the short and Jong line Marubozu candles can be one of the following e white marubozu e opening white marubozu e closing white marubozu e black marubozu e opening black maruboz
114. te body second candle o black body o body above prior body third candle o black body O open above prior open o close below prior close o close above the close from the first candle CANDLESCANNER USER GUIDE 14 A 5 Four line patterns Pattern one line Description Name Concealing Baby Swallow Japanese name kotsubame tsutsumi Forecast bullish reversal Trend prior pattern downtrend Opposite pattern none Name Bearish Three Line Strike Japanese name santeuchi Forecast bearish continuation Trend prior pattern downtrend Opposite pattern Bullish Three Line Strike Construction first candle o candle in a downtrend o Black Marubozu second candle o Black Marubozu open within the prior body o close below the prior close third candle o High Wave without lower shadow black body open below prior close long upper shadow high above the prior close fourth candle o black candle O open above the prior high o close below the prior close first candle o candle in a downtrend o black candle second candle o black candle open within the prior body o close below the prior close third candle o black candle open within the prior body o close below the prior close fourth candle o white candle o open below the prior close o close above the first candle s open CANDLESCANNER USER GUIDE 78 Pattern Construction one line Description e first can
115. te or black candle o open below the prior open Name Bullish Breakaway Japanese name hanare sante no shinnzukae fourth candle o black candle Trend prior pattern downtrend o close below the prior close Forecast bullish reversal Opposite pattern Bearish Breakaway fifth candle o white candle O appears as a long line O open above the prior close o close above the second candle s open but below the first candle s close gap from the second candle is not closed CANDLESCANNER USER GUIDE 80 Pattern 5 Description one line P Name Falling Three Methods Japanese name shita banare sanpoo ohdatekomi Forecast bearish continuation Trend prior pattern downtrend Opposite pattern Rising Three Methods Construction e first candle O O candle in a downtrend black candle e second candle O O O O white candle open above the prior close close below the prior open shadows within the prior low and high e third candle white candle open above the prior open close above the prior close black candle open above the prior close close above the prior open shadows within the low and high from the first candle e fourth candle O white candle if the prior candle 1s white O O open above the prior open close above the prior close if the prior candle is black O O O open above the prior close close above the prior open shadows within the low and high from
116. the first candle e fifth candle black candle open below the prior close close below the close from the first candle CANDLESCANNER USER GUIDE 81 Pattern 5 Description one line P Name Rising Three Methods Japanese name uwa banare sanpoo ohdatekomi Forecast bullish continuation Trend prior pattern uptrend Opposite pattern Falling Three Methods Construction e first candle O O candle in an uptrend white candle e second candle Q O O O black candle open below the prior close close above the prior open shadows within the prior low and high e third candle black candle open below the prior open close below the prior close white candle open below the prior close close below the prior open shadows within the low and high from the first candle e fourth candle O black candle if the prior candle 1s white O O open below the prior close close below the prior open if the prior candle is black O O O open below the prior open close below the prior close shadows within the low and high from the first candle e fifth candle white candle open above the prior close close above the close from the first candle CANDLESCANNER USER GUIDE 82 Pattern wae Description Construction one line e first candle o candle in a downtrend o black candle second candle o black candle open below the prior open Name Ladder Bottom
117. ts you can specify which parts of the statistics should be exported Please note that export to Excel creates just a single file whereas export to a text files creates multiple files FILE HOMIE DATA STATISTICS RTL y ul CS gt E Text Metastock Candle Image Excel Text Scanner Import Groups CSCO Tab 1d sz Patterns Dictionary 2 ORG AX Stat 1d Patterns Occurrences Patterns Efficiency Patterns Efficiency Within Group Symbols by Pattern 1 Click on the list on the right or an the chart directly for details Folder ICA File name DJIA quotes days 1 group statistics all Precious Metals SEP ASX 20 S amp P TSX 60 World Stock Indexes Select Patterns Occurrences Patterns Efficiency symbols Patterns Efficiency Within Group Symbols by Pattern Type eer Name Patterns Efficiency Within Group Symbols by Pattern AXP American Express Basic Candles Occurrences BA Boeing Basic Candles Occurrences Details CAT Caterpillar Range CSCO Cisco Systems CNX Chevron DD DuPont DIS Walt Disney id GE General Electric 1d Figure 5 12 Statistics export window CANDLESCANNER USER GUIDE 49 6 Backtesting Once we know the patterns occurrences and efficiency based on the statistics calculated by CandleScanner we can go a step further Specifically we can backtest our trading ideas using the entry and exit signals we found in the candle patterns
118. tton Wizard reads the folder specified in STEP 7 and displays all available symbols on the left side Select symbols which you want to import into CandleScanner and press gt button You can also add all symbols by clicking on the gt gt button If you want to do the opposite use lt and lt lt buttons respectively You can select more than one element by pressing CTRL button or SHIFT button to select multiple rows at once Press Next gt button Specify into which symbols group you want to store the imported symbols You can either select one from the already existing groups option Existing group or create a new one option New group Note that if you specify a group it has to be of the same type i e ntraday or EOD as the data which is being imported Press Next gt button The importing process is completed If any problems were encountered during the import you will see details in the lower panel of this screen Press Finish button Importing ASCII data quotes To import data to CandleScanner from text file click Import Text File button from the DATA menu on the ribbon bar This opens ASCII Data Import Wizard which guides through the whole process There are 5 steps within this wizard If you need you can use lt Back button to return to the previous step STEP 1 2 4 Specify the folder on your computer where the ASCII data is stored by clicking button beside the Select folder containing ASCII data text field
119. u e closing black marubozu 3 3 3 Spinning tops Candlesticks with different opening and closing prices and having at least one shadow where the body of the candle cannot be longer than any shadow are called spinning tops The following types of spinning tops are possible e white spinning top short and long line if none of the shadows are three times longer than the body e black spinning top short and long line if none of the shadows are three times longer than the body e high wave a kind of spinning top occurring on a ong line if one of the shadows is at least three times longer than the body In CandleScanner spinning tops are marked by default in dark blue color 3 34 Doji candles Candles in which there is no body because the opening price is equal to the closing price are called doji candles jap fool clumsy slip of the tongue Note that CandleScanner can also classify a candle as a doji when the opening and closing prices differ by a very small amount in theory a doji should not have a body but the difference may be negligible and the on the chart is hardly visible More on this in section 3 4 Doji may occur with or without shadows There are the following types of doji candles e four price doji e long legged doji ong line CANDLESCANNER USER GUIDE 31 e dragonfly doji ong line e gravestone doji ong line In CandleScanner the doji candles are marked in red color by default when using the Cand
120. unctionality in CandleScanner e The entire application functionality is accessible from a single place e The Ribbon in CandleScanner is divided into the tabs HOME DATA and VIEW These tabs are permanently visible e There are also tabs which are shown contextually STATISTICS and BACKTEST e When the users click on a tab they are presented with the ribbon groups such as New Window or Active Window in the HOME tab FILE HOME DATA VIEW t 1 0 i i 1 ae WV E RE m AS smaa om VOA Scanner Price Chart Recent Symbol Tests Quotes Patterns PFE m Q D Other Bars Line averages Bands Other Settings Patterns Statistics Table Dictionary a Scanner New Window Active Symbol Interval Chart Indicators I Groups T 2 3 gt Y 5 Mm E il Figure 2 10 Ribbon bar provides a flexible way for organizing all the functionality of CandleScanner Tabs which are shown only contextually improve CandleScannet s usability As an example let s take the STATISTICS tab When user is working with the chart document the STATISTICS tab is hidden see Figure 2 10 This is useful because in the context of a chart document none of the actions available in that tab are relevant When user opens a new statistics document or switches to an already opened statistics document making it active the STATISTICS tab appears see Figure 2 6 When the user switches back to the chart document the STATISTICS tab disappears The HOME tab i
121. valid It is assumed in CandleScanner that the decisions as to whether we are dealing with a long or a short line we take the whole candle into account the body with the shadows A common analyst s mistake is to look at the historical chart and determine the height and dynamics of the candle not only on the basis of the historical prices but also on future candles However while the candlestick is being formed we do not know the future yet therefore we should not use the information about the future volatility of the market Figure 3 3 shows that the green candles representing a long line have very different spans For example the September long lines are significantly shorter than those as at the end of October But in both cases we deal with long lines although in different market conditions cD Long short line is also Known as a long short day The term day short or long refers to a single line of candle and derives from the period where the charts were created on the basis of daily quotations In the case of charts constructed on the basis of intraday prices for example 5 minutes hourly or others such a term can be confusing For this reason in CandleScanner the term long short line is used to avoid any misunderstanding Moreover in Greg Morris s book titled Candlestick Charting Explained such phrases as long days and short days are referring only to the height of the candle body This is a surprising approach becau
122. ver when apparent emerging patterns are analysed and discussed it is frequently the case that the conclusions are imprecise and indeed often result in contradictory interpretations of what the patterns are actually saying Hence to accurately implement a tool scanning charts for candle patterns is not a straightforward undertaking Candle patterns are very interesting for traders due to their simplicity elegance and natural interpretation of market sentiment No matter how markets evolve patterns will appear on the charts Essentially the core premise and assumption underlying the application of technical analysis is that such patterns are repetitive and detectable Technical analysis is widely employed in various financial markets informing traders about the non fundamental determinants of price in other words market sentiment However observing an apparent repeating pattern on a chart can result in completely different trading outcomes Experienced traders know that the efficiency of an investment decision depends not only on the analytical tool s employed but also on other factors such as risk and position management In this regard CandleScanner can be implemented as an objective tool aiding the trader in taking positions based on the systematic evaluation of price behavior Trying to identify patterns manually or visually by merely scanning the charts can be problematic It can be also be dangerous as there may be a t
123. w e fourth candle o black candle if the third candle 15 black o open below the prior open o close below the prior close if the third candle is white o open below the prior close o close below the prior open o low above the prior low e fifth candle white candle open above the prior open close above the high from the four previous candles Japanese name uwa banare sante oshf Trend prior pattern uptrend Opposite pattern none CANDLESCANNER USER GUIDE 84 CANDLESCANNER USER GUIDE 85
124. witching between different chart types Candlestick charts can be displayed in one of the four modes e Classic This is most widely used candlestick chart mode in which down black candlesticks are coloured and mp white candlesticks are empty e CandleScanner This mode is recommended for more advanced users For more details please read Candlestick charts CandleScanner color theme e Trend This is similar to Classic mode i e we have colored and empty candlesticks but the candles have a different colour depending if they in an uptrend or a downtrend e Custom This mode allows a lot of customization by the user All modes can be customized using Styles please see Using chart styles for more details 0 FILE HOME DATA VIEW M Groups Vy En W j M Symbols E y aa emesis Default Candle Trend Custom Properties eu AN Windows Layout Candle Appearance Figure 2 13 Buttons for switching between different candlestick chart mode 2 3 2 Using chart styles There are many characteristics on the chart area in CandleScanner which can be customized to meet your specific requirements For example you can change features such as e size and color for all chart types i e candlesticks bar and line e font size and color e background color e background details interlaced or not axes size line type and color CandleScanner allows managing chart styles which can be saved as themes Users can create new and modify ex
125. xiliary they can be pinned opened or unpinned and then auto hidden i e collapsed against the nearest side of the tool window container When there are any hidden tool windows 1 e unpinned there is a so called auto hide tool tab strip visible The Auto hide tool tab strip contains all the hidden windows in minimized form displaying just their names without the content Clicking on them expands the hidden window When the mouse is not hovered over the unpinned tool window it will minimize automatically into the auto hide tool tab strip again This can be very helpful because it may happen that we want to have more working space to display for example a document window with candlestick charts Hidden unpinned tool windows can be pinned if we want to them to be always visible Differences in the behavior of the document windows vs tool windows are also reflected in their context menus Document window has commands for closing windows creating new horizontal and vertical tab groups and for moving windows between groups Tool window context menu has commands that allow the panel to be Floating Dockable causes the panel to dock or Tabbed Document If Tabbed Document is selected the tool window becomes hosted in a tab strip container along with the tabbed documents Auto Hide causes the panel to be unpinned and collapsed Hide makes the panel invisible The anatomy of the windows management system in CandleScanner is shown in the Figure 2 3 Some of
126. y working as you expect them to e Build trading strategies based on candle patterns and simulate transactions backtesting CandleScanner is highly configurable meaning that you can adjust it to your specific needs The algorithms scanning the candlesticks charts have many parameters which can be set by the user Also the visual aspects of the application are highly customizable enabling everyone to find their desired optimal settings Please check out the Facebook site www facebook com candlescanner or our website www candlescanner com for further discussion of CandleScanner s capabilities candlestick analyses featured articles the interpretation of candlesticks patterns backtest results and more Finally recalling Warren Buffet s alleged reflection on the markets I d be a bum in the street with a tin cup if the markets were efficient CandleScanner can help you exploit such inefficiencies CANDLESCANNER USER GUIDE 4 1 1 Technical support When you purchase the CandleScanner license full or upgrade you are entitled for free to unlimited technical support for one full year since the date of purchase To obtain help please use the following email address contact candlescanner com Typically our response time is less than 12 hours and does not exceed 72 hours including weekends and holidays Mostly technical issues are fixed within 10 working days 1 e time to release a bug fix but we reserve the right to excee

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