The basis of a large portion of technical analysis is pattern recognition—that is, the ability to spot one of the classic technical patterns (such as a wedge, a head-and-shoulders, a triple bottom, etc.) and estimate in what direction and by what amount the price is likely to move.
This book is all about recognizing patterns and applying them to your own trading, but getting some assistance in finding candidates based on a set of electronic eyes is a great time-saver. Pattern recognition is hard enough for humans, so it is especially hard for computers, since the subtleties of some patterns can produce a lot of false positives. However, an automatic way of seeking patterns can at least gather up good candidates for your own analysis. A few of the larger products on the Internet for this task are:
- Recognia (www.recognia.com): This Canadian-based outfit covers a huge universe of financial instruments—65,000 as of this writing—from all over the world. The product has been around for years, and its feature set and robustness are excellent. Recognia focuses on providing their services through brokerages, but individual subscriptions are available as well.
- AutoChartist (www.autochartist.com): This is a service that scans for patterns in real-time, including Fibonacci patterns. They have enhanced this to be an excellent tool for foreign exchange traders as well.
- Thinkorswim (https://www.thinkorswim.com/tos/client/index.jsp): The thinkorswim brokerage is ...