CandleScanner User Guide

Introduction

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 behaviour. However, 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 behaviour.

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 tendency 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:

  • Quickly scan candlestick charts to find all occurrences of candle patterns
  • Measure the efficiency of patterns, i.e. are they working as you expect them to?
  • 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 or our website 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.

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Technical support

When you purchase the CandleScanner license, you are entitled to free support. 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 (i.e. time to release a bug fix) but we reserve the right to exceed this period on occasions. During this period, you are informed about the estimated time and current progress on the issue.

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Editions of CandleScanner

Currently as of this writing there are three editions of CandleScanner available:

  • CandleScanner Basic
  • CandleScanner Standard
  • CandleScanner Professional

The following table summarizes differences between CandleScanner editions.

FeatureBasicStandardProfessional
End-of-day (EOD) charting & automatic patterns scanning
Intraday (n minutes, n hours) charting & automatic patterns scanning
Algorithms detecting 106 candle patterns
Symbol statistics
Symbols Group statistics
Technical Analysis indicators
Backtesting module

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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:

  • Microsoft Windows XP
  • Microsoft Windows Vista
  • Microsoft Windows 7
  • Microsoft Windows 8
  • Microsoft Windows 8.1
  • Microsoft Windows 10

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.

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Hardware requirements

To run CandleScanner your computer need to have, as minimum, the following parameters:

  • Processor: 1 GHz or faster x86-bit or x64-bit with SSE2
  • Memory: 1 GB RAM (32-bit) or 2 GB RAM (64-bit)
  • Hard disk: 300 MB available disk space
  • Display: 1366 × 768 screen resolution

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Basic theoretical concepts

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. For more details, please refer to the book titled "The Japanese Chart of Charts" by Seiki Shimizu.

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:

The figure below shows a candlesticks chart using the CandleScanner Color Theme. This theme is optional, and can be switched off if you prefer a simple candlesticks chart using just two colors. Notice that it makes sense 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.

Alcoa Inc. candlestick chart using CandleScanner Color Theme. Due to using colors it is very easy to see long/short lines (green and yellow candlesticks respectively), spinning tops (blue candlesticks) and doji candles (red candlesticks).

Figure 1. Alcoa Inc. candlestick chart using CandleScanner Color Theme. Due to using colors it is very easy to see long/short lines (green and yellow candlesticks respectively), spinning tops (blue candlesticks) and doji candles (red candlesticks).

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 long/short lines.

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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 more 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 (i.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 averages 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:

  • bullish reversal patterns – reversing downtrend into an uptrend
  • bullish continuation patterns – continuation of uptrend
  • bearish reversal patterns – reversing uptrend into downtrend
  • bearish continuation patterns – continuation of downtrend

In CandleScanner the user can set the following parameters related to price trend:

  • the period (number of candles) of the moving average used as a trend indicator
  • the type of average used as a trend indicator
  • 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.

Figure 1.

Figure 1. 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 1 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.

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Introduction

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 is important to learn and understand CandleScanners capabilities.

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 candlestick reversal patterns. On our website, we are constantly extending the Patterns Dictionary, which explains the candlestick patterns. 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.

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 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.

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Blended candlesticks

We can ‘blend’ different adjacent candlesticks to form a single candlestick, thus summarizing 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, blended 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. Analyzing 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 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 1. Hammer/Hanging Man

Figure 1. Blended candles result in a combination known as Hammer/Hanging Man.

Figure 1 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 body of the previous period.

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 downtrend.

To understand how to construct blended candlesticks we need first to 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 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 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 following information:

  • Open price when the 15-minutes period begins
  • Close price when the 15-minutes period ends
  • 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 20th 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 (i.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.

In CandleScanner, the user can create custom time intervals to plot on the chart. The following naming convention is used:

  • m is used for minutes; for example 1m = 1 minute, 2m = 2 minutes and so on
  • h is used for hours; for example 1h = 1 hour, 2h = 2 hours and so on
  • d is used for days; for example 1d = 1 day, 2d = 2 days and so on
  • w is used for weeks; for example 1w = 1 week, 2w = 2 weeks and so on
  • M is used for months; for example 1M = 1 month, 2M = 2 months and so on
  • Y is used for years; for example 1Y = 1 year, 2Y = 2 years and so on
  • c is used for base time interval candles; for example 1c = 1 candle, 2c = 2 candles and so on

In CandleScanner you can switch the time interval in two ways:

  • Using the time interval buttons
  • Using the combo-box with user defined intervals

Please note that time interval (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 weekly blended candles would consist of different numbers of daily candles. For this reason, CandleScanner employs the notion of n base time interval candles.

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Short and long 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 line is the one where the market volatility is very low (small price range). Similarly, the long line will be the one of high volatility (high price range). The short/long line can be displayed in CandleScanner with different colors so 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 recognize correctly, 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.

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.

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/invalid.

Figure 1. 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 spans (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/invalid.

Figure 1 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.

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, because 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.

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 regarded as short lines.

Determination of the short and the long 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.

Figure 2. Determination of the short and the long line, depending on the average price range. The green line shows 70% of the price volatility relative to exponential average of 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.

Figure 2 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.

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Candlestick construction

The construction of the single candlestick, also known as the candle line, is based on the basic data in a single time interval and consists of the following (OHLC) components:

  • opening price (Open)
  • maximum price (High)
  • minimum price (Low)
  • closing price (Close)

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.

It is common to find OHLC 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. jittai). 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 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.

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Basic candles

Spinning tops

Candlesticks with different opening and closing prices and having at least one shadow, where at least one shadow has to be longer than the body, are called spinning tops. The following types of spinning tops are possible:

  • White Spinning Top (short and long line if none of the shadows are three times longer than the body)
  • Black Spinning Top (short and long line if none of the shadows are three times longer than the body)
  • High Wave – a kind of Spinning Top occurring on a long 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.

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Introduction

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, either 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. Most of them are not patterns as such, but they can often play an important role in the assessment of the current situation of the market and its possible further development. Basic candles are components of more complex patterns which can contain two, three or even more basic candles.

Every single candlestick on the chart is classified as one and only one particular basic candle. We can look at basic candles as building blocks, from which patterns are composed. Having the accurate way of defining basic candles helps to define patterns being precise and avoiding ambiguity. Basic candles are not patterns per se.

There are four groups of basic candles:

  • Candles, that is candles that have two shadows shorter than the body.
  • Marubozu candles, that is candles that do not have at least one shadow; additionally the shadow, if present, cannot be longer than the body.
  • Spinning top candles, that is candles with different opening and closing prices and having at least one shadow, where at least one shadow has to be longer than the body.
  • Doji candles, that is candles that do not have a body; in other words the open price is equal to the close price.

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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 then on the chart is hardly visible). For more on this please see the following articles: The problem with doji candles (Part 1) and The problem with doji candles (Part 2).

Doji may occur with or without shadows.

There are the following types of doji candles:

In CandleScanner the doji candles are marked in red color by default when using the CandleScanner 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 or 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.

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Main window interface

Data manipulation within tables

Many components in the CandleScanner application are displayed in tables which allow the user to manipulate the data easily. Key features of such data manipulation includes:

  • Sorting. Many CandleScanner tables support data sorting. When sorting is enabled, the user can click on the column headers to control the sorting order.
  • Filtering. Excel-Like filtering offers a way for filtering data in a table by the end user. It is built in a way to mimic the standard Excel filtering functionality and offers a dialog, which contains a list of distinct column values, from which the end user can choose.
  • Column reordering. Some tables in CandleScanner supports column reordering by the user at run-time. The user has just to drag the desired column's header at the desired position among the other headers and drop it there.

Once you become familiar how these features work in one place, you may found them in other places working in the same fashion.

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Introduction

CandleScanner is a highly customizable application which can be configured to meet user'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:

  • 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.
  • Tabbed windows which can be switched between, resized, dragged to arrange in various configurations and closed.
  • Windows from the main CandleScanner window can be dragged outside 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).
  • The user has complete control over sizing and layout behavior.
  • 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.

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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 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 separate types of containers within which they can be docked.

Figure 1.

Figure 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).

The container is just a place in which a specific window can 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 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 – 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.

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 a list of symbol groups (e.g. S&P 500) 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 the newly selected group. This mechanism is presented in the Figure 2.

Figure 2.

Figure 2. Clicking on the S&P 500 item in the Groups tool window causes the reloading of the S&P 500 components in the Symbols tool window, which then displays the S&P 500 components (symbols), as shown.

Another difference between document windows and tool windows is in the way they can be managed within CandleScanner. Because tool windows are auxiliary 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 (i.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 3. Some of the components presented in that figure are described in the subsequent subsections.

Figure 3.

Figure 3. Anatomy of CandleScanner windows. Tool windows are in green rectangles (called tool tab strips). In the yellow rectangle, there is a document window container which is divided by a splitter bar (violet line). We can see two document tab strips (red 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.

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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:

  • Within a tool tab strip
  • From one tool tab strip to another existing tool tab strip
  • From one tool tab strip to a new tool tab strip
  • From a tool tab strip on a form to a floating tool tab strip
  • 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.

Besides to moving tool window in different tool tab strip containers, you can use the context menu or “pin” 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:

  • Save critical space on the end user screen
  • Allow more information to be presented at run time
  • 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 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 Figure 1.

Figure 1.

Figure 1. When the mouse hovers over the splitter bar the mouse icon changes into line 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). 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.

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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 relative 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, i.e. the destination for the window you are moving.

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.

Figure 1.

Figure 1. 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.

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Floating windows

Both document and tool windows can be switched into so-called floating mode.

There are multiple ways to float a tool window:

  • Drag the tool window out of the docked container area to an existing floating container
  • Drag the tool window to 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
  • Right-click the title bar and select Floating from the context menu (works only for the tool windows)
  • Double-click the title bar

To "un-float" a tool window, drag the title bar to a docked container, or double-click the title bar.

Figure 1.

Figure 1. Floating window. This can be helpful for example when we want to use CandleScanner on more than one monitor.

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Auto-hiding windows

If you want a 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.

Figure 1. 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.

Figure 1. 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.

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.

Figure 2. 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.

Figure 2. Unpinned (hidden) Properties tool window.

Figure 3. Showing hidden tool window. Note that a mouse cursor is over the tab.

Figure 3. Showing hidden tool window. Note that a mouse cursor is over the tab.

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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.

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Ribbon menu bar

Ribbon bar control provides a flexible way of organizing all of the functionality in CandleScanner:

  • The entire application functionality is accessible from a single place
  • The Ribbon in CandleScanner is divided into the tabs HOME, DATA and VIEW. These tabs are permanently visible
  • There is also tab which is shown contextually: BACKTEST
  • 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
Figure 1. Ribbon bar provides a flexible way for organizing all the functionality of CandleScanner.

Figure 1. Ribbon bar provides a flexible way for organizing all the functionality of CandleScanner.

Tabs which are shown only contextually improve CandleScanner’s usability. When a user is working with the chart document, the BACKTEST tab is hidden. This is useful, because in the context of a chart document none of the actions available in that tab are relevant. When a user opens a new backtest document or switches to an already opened backtest document making it active, the BACKTEST tab appears. When a user switches back to the chart document, the BACKTEST tab disappears. The HOME tab is available at all times.

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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:

  • Blue
  • Dark

A stylish Dark look and feel is much less distracting for many people whereas Blue look is very much similar to most other applications you may already are using.

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.

Figure 1. CandleScanner in Dark Theme.

Figure 1. CandleScanner in Dark theme.

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Importing data quotes

Importing CRB PRO data quotes

To import data into CandleScanner from CRB PRO files click the Import » CBR PRO button from the DATA menu on the ribbon bar. This opens the PRO Data Import Wizard which guides you through the whole process. There are 4 steps within this wizard. If you need, you can use the < Back button to return to the previous step.

STEP 1

  1. Specify the folder on your computer where the PRO files are stored by clicking the button beside the Select folder containing PRO data text field.
  2. Select checkbox Automatic quote update if you would like CandleScanner to read the directory from which you are importing.
  3. Press Next > button.

STEP 2

  1. Wizard reads the folder specified in STEP 1 and displays all available symbols on the left side. Select symbols which you want to import into CandleScanner and press > button. You can also add all symbols by clicking on the >> button. If you want to do the opposite use < and << buttons respectively. You can select more than one element by pressing CTRL button or SHIFT button to select multiple rows at once.
  2. Press Next > button.

STEP 3

  1. 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. intraday or EOD as the data which is being imported.
  2. Press Next > 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.

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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 here.

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.

You can also export data to a format which can be easily understood by CandleScanner, called CandleScanner format. Go here for more on CandleQuote.

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 it 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 < 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 read the directory from which you are importing to see new quotes.
  3. Press Next > button.

STEP 2

  1. Wizard reads the folder specified in STEP 1 and displays all available symbols on the left side. Select symbols which you want to import to CandleScanner and press > button. You can also add all symbols by clicking on the >> button. If you want to do the opposite use < and << 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 > 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. intraday or EOD as the data which is being imported.
  2. Press Next > button.

STEP 4

  1. The importing process is completed. If any problems were encountered during the import, you would see details in the lower panel of this screen.
  2. Press Finish button.

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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.
  2. 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 Importing ASCII data quotes section.

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Automatic quotes update

The Automatic quotes update simplifies updating 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 update the data periodically.

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.

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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). CandleScanner 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.
  • CRB PRO format. This is a binary file format created by the Commodity Research Bureau (CRB). For more please check the following link: http://www.crbtrader.com/support/prodesc.asp.
Figure 1. Buttons for importing data into CandleScanner.

Figure 1. Buttons for importing data into CandleScanner.

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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:

  • 347 days of 1-minute time intervals
  • 83 years (assuming there is 250 trading days in a year) of hourly time intervals
  • 2000 years (assuming there is 250 trading days in a year) of daily data

In general, 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.

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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:

  • Groups cannot be embedded within other groups
  • Every group must be either of type intraday or EOD (end-of-day)
  • Group names have to be unique
  • Symbols always belong to a particular group
  • Symbol names (tickers) must be unique within a given group (the same symbol name can exist, however, in other groups)
  • Group always is assigned to one specific Scanner Settings

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 type reflecting the time interval. There two types: intraday for all data quotes smaller than a day, and EOD (end-of-day) for daily quotes. Groups of type EOD cannot store symbols of type intraday.

Every group has always assigned a specific Scanner Settings, which defines the detailed conditions for searching algorithms recognizing the patterns.

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.

Organizing symbols this way introduces clarity, especially when it comes to the calculation of statistics for the whole group.

Please also note that Scanner Settings have a great impact on patterns efficiency statistics. For example settings for 1-minute bars will be most probably irrelevant for 180-minute bars.

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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 < 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 Metastock data text field.
  2. Select checkbox Automatic quote update if you would like CandleScanner to read the directory from which you are importing to.
  3. Press Next > button.

STEP 2

  1. Wizard reads the folder specified in STEP 1 and displays all available symbols on the left side. Select symbols which you want to import into CandleScanner and press > button. You can also add all symbols by clicking on the >> button. If you want to do the opposite use < and << buttons respectively. You can select more than one element by pressing CTRL button or SHIFT button to select multiple rows at once.
  2. Press Next > button.

STEP 3

  1. 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. intraday or EOD as the data which is being imported.
  2. Press Next > 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.

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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 in this wizard. If you need you can use < Back button to return to the previous step.

STEP 1

  1. Specify the folder on your computer where the ASCII data is stored by clicking button beside the Select folder containing ASCII data text field.
  2. In the field Import schema (optional) you can select an import 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.
  3. Select checkbox Automatic quote update if you want to make CandleScanner read the directory from which you are importing to see new quotes.
  4. Press Next > button.

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, its 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.

STEP 2

  1. Wizard reads the folder specified in STEP 1 and displays all available symbols on the left side. Select symbols which you want to import to CandleScanner and press > button. You can also add all symbols by clicking on the >> button. If you want to do the opposite use < and << 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 > 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. intraday or EOD as the data which is being imported.
  2. Press Next > 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 > button.

STEP 5

  1. The importing process is completed. You can save current import settings as an import 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.

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Working with price chart

Supported price chart types

CandleScanner supports three types of price charts:

  • candlesticks chart (for more see Candlestick construction)
  • bar chart
  • line chart
  • You can switch between different types of chart using buttons located on the ribbon bar at HOME » Chart group.
Figure 1. Switching between different chart types.

Figure 1. Switching between different chart types.

Candlestick charts can be displayed in one of the four modes:

  • Classic. This is most widely used candlestick chart mode, in which down (black) candlesticks are coloured and up (white) candlesticks are empty.
  • CandleScanner. This mode is recommended for more advanced users. For more details, please read Candlestick charts: CandleScanner color theme.
  • 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.
  • Custom. This mode allows a lot of customization by the user.

All modes can be customized using Styles.

Figure 2. Buttons for switching between different candlestick chart mode.

Figure 2. Buttons for switching between different candlestick chart mode.

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Using chart styles

There are many characteristics of the chart area in CandleScanner which can be customized to meet your specific requirements. For example, you can change features such as:

  • size and color for all chart types, i.e. candlesticks, bar, and line
  • font size and color
  • background color
  • background details (interlaced or not, axes size, line type, and color)
Figure 1. Style edition.

Figure 1. Style edition.

CandleScanner allows managing chart styles which can be saved as themes. Users can create new and modify existing 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 (i.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 VIEW » Style » 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 to see the changes.

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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.

Figuer 1. Zooming buttons marked in the red rectangle.

Figuer 1. Zooming buttons marked in the red rectangle.

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Scanning candlestick patterns

Supported candlestick patterns

Candlestick patterns scanning functionality is the central and most important feature of CandleScanner. It allows you to find any candlestick pattern occurrences quickly on the chart. You can also adjust the scanning algorithms to meet your specific requirements.

In CandleScanner, you can use Patterns Dictionary available from the HOME » New Window menu as a quick reference. From there you can navigate to the full patterns description located on our website.

Figure 1. Patterns Dictionary document.

Figure 1. Patterns Dictionary document.

CandleScanner recognizes in total 106 patterns: 20 basic candles and 86 candlestick patterns. The following list of authors and their books had the biggest influence on how the CandleScanner scanning algorithms were implemented:

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.

For the detailed description of all candlestick patterns, please see our online Patterns Dictionary.

Following patterns were discovered by the CandleScanner team during the development of the software: Turn Up, Turn Down, Bullish Strong Line, Bearish Strong Line, Bullish Tasuki Line and Bearish Tasuki Line. They are included in the list of supported patterns due to their good efficiency and high frequency, which makes them potentially attractive for traders.

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List of identified patterns

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 updated when you switch the time interval in which you are displaying the price chart.

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.

When the symbol is 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. The 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 any column. For convenience, patterns are displayed on the list in different colors for bullish and bearish patterns (green and red by default). 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. A Name can be either a number, using the value from the # 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 Label menu.

Figure 1. List of identified patterns.

Figure 1. List of identified patterns.

Selection of more than one item from the pattern list is possible by holding the CTRL key down and selecting each pattern by left 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 unless VIEW » Synchronization » Chart With List option is not switched off.

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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 following checkboxes: Chart With List and List With Chart. Both checkboxes are available in the VIEW » Synchronization menu.

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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:

  • Bullish. Highlights all bullish patterns (both bullish reversal and bullish continuation). By default, patterns from this group are highlighted by a greenish background.
  • Bearish. Highlights all bearish patterns (both bearish reversal and bearish continuation). By default, patterns from this group are highlighted by a reddish background.
  • Conflicting. Highlights all conflicting patterns, i.e. the cases where bullish and bearish patterns occur at the same time. By default, such situations are indicated by a white background.
Figure 1.

Figure 1. The Pattern Highlighting and Style Edition.

Every single group of patterns, i.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.

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Recent patterns

The Recent Patterns document is designed for a regular scan of the symbols group to find latest patterns. For example, let assume that we are using daily charts, and the quotes data is also updated daily (please see the chapter about importing data into CandleScanner for more details). Once the data is updated the easiest way to see if any new patterns were formed is to use the Recent Patterns document.

Note that when you are performing a scan for the same Group, Interval, and Scanner Settings, it will be executed incrementally if some previous search results already exist. In other words, the application will only scan the quotes that were not yet scanned, which may significantly speed up the scanning operation.

Using the right scanner settings profile (Scanner Settings field in the New scan tab) may have a great impact on the search results. Performing the same scan, using a different scanner settings profile will most likely produce different search results.

Figure 1. Recent Patterns functionality.

Figure 1. Recent Patterns functionality.

To open a Recent Pattern document use the HOME » New Window » Recent Patterns button on the ribbon. A popup window will appear from which the user may perform two operations:

  • Perform a new scan (New scan tab)
  • Open an existing scan (Last scan tab)
Performing a new scan

You need to select a group of symbols which you would like to scan (Groups field).

Then you need to specify a time interval of candlesticks you want to use for the scanning process (Interval field). For example when you have a group of Forex symbols saved in 5-minutes base intervals, you can perform a few scans on this group for different candlesticks periodicity, e.g. 5-minutes bars or hourly bars.

In CandleScanner, you may have several scanner settings (Scanner Settings field). For example, you may have different scanner settings profile for 5-minutes forex bars and different for a daily S&P500 bars. Therefore, you need to specify the scanner settings to be used to perform the particular scan.

Finally, you need to define for how many most recent candlestick bars you want to see search results (Scan Period field).

Opening an existing scan

Depending on the number of the symbols within a symbols group, the scanning process may be quick or time-consuming. If you do not have a newer market data, but would like just to see patterns which were already found, you can open previous scan results.

Viewing the Recent Patterns search results

Once the scanning process is finished, or you are opening an existing search result, a table is produced where all found patterns are contained. You may easily filter and sort them using the table column headers.

Double-click on any row to open a new chart document to see a particular pattern occurrence.

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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 profiles if needed. This can be helpful on certain occasions such as:

  • Different settings for different markets (e.g. stocks, currencies, commodities)
  • Different settings for different time intervals (e.g. 5-minute, hourly, daily)
  • 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.

Although scanner 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.

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Practical recommendations on using CandleScanner

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 » Candle Patterns.

Please note that basic candles are always included in the scanning process, i.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.

Figure 1. In this window, you can select candlestick patterns that should be included/excluded during the scanning process.

Figure 1. In this window, you can select candlestick patterns that should be included/excluded during the scanning process.

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 i7 @ 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 main factors which have the biggest impact on the speed of CandleScanner:

  • Number of quotes per symbol in a given time interval (i.e. number of candlesticks per symbol on the chart)
  • Number of patterns which are looked for
  • Number of all symbols loaded into CandleScanner (across all symbol groups)

The maximum number of candlesticks (quotes) for one symbol in CandleScanner cannot exceed 500,000 (half million).

Having, 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 to 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.

The base time interval of the symbol is the minimal time interval which 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 scanning those patterns which are not interesting. As an example of a good filter for patterns to scan, you can use the following 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.

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Working with statistics

Introduction

Note that Symbols Group statistics module is not available in CandleScanner Basic edition (symbol statistics is available however).

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 is: the number of accurate occurrences (how statistically significant the results are) and the price behavior within 5 or 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 5 or 10 candles (depending on the user's preferences) should demonstrate its prognostic value.

The efficiency of a pattern is measured by checking the maximum price (for bullish patterns) or minimum price (for bearish patterns) within test period. CandleScanner is using two periods: 5 or 10 candles following the pattern. Every period is producing a separate result.

Stop Loss order is used to have more realistic results. If Stop Loss level is reached, the algorithm stops and the so far the most extreme price is used to calculate efficiency level.
The user can set Stop Loss level, and ranges for FALSE, LOW, MEDIUM and HIGH efficiency. These settings may have a great impact on the efficiency readings.

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Algorithm assessing a pattern’s efficiency

Please note that scanner settings 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 a major impact on the number of found patterns. It may happen, for instance, that a Hammer pattern will be identified as a doji candle and will be rejected.
An even greater impact may have Statistics Calculation Settings.

Therefore, it is recommended that any changes to the settings of the scanner are performed with a full understanding of possible consequences during the scanning process.

 


The algorithm evaluating the efficiency of a bullish pattern occurrence works as follows:

  1. If Stop Loss price level is reached on the first candle following the pattern, the occurrence is marked as FALSE.
  2. If Stop Loss price level is reached within test period, the highest price reached prior to Stop Loss is used to assign the pattern occurrence to appropriate efficiency level (i.e. FALSE, LOW, MEDIUM or HIGH).
  3. If Stop Loss price level is not reached within test period, the highest price reached during the full period is used to assign the pattern occurrence to appropriate efficiency level (i.e. FALSE, LOW, MEDIUM or HIGH).

The algorithm for every pattern occurrence is run for the period of 5 and 10 candles, producing two separate results.

If there are not enough candles following pattern occurrence, the result is marked as NO DATA.

The algorithm works the same for bearish patterns, except that instead of using the highest price reached during the test period, the lowest one is used.

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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 given symbol. It is very important to know that the same pattern can behave totally different for different symbols/markets.

To open symbol statistics click HOME » Symbol Statistics from the New Window buttons group on the ribbon bar.

Symbol Statistics window is composed of tabs. Every tab presents statistics from a different perspective.

Symbol statistics is composed of five tabs:

  • Patterns Occurrences
  • Patterns Efficiency (Chart)
  • Patterns Occurrences by Date
  • Basic Candles Occurrences
  • Report
Patterns Occurrences

In this tab you can see how many patterns' occurrences were detected by the application for a given symbol. On the left, there is a pie chart where every piece is reserved for a different pattern. When you click directly on the chart, an appropriate row from the list on the right will be selected. When any item from that list is clicked, then the appropriate pie chart piece will be enlarged.

Please note that the occurrences can be filtered in many ways. For example, you may be interested to see only statistics for bullish patterns. To do so click on the funnel symbol in the Forecast column and set a required value.

Patterns Efficiency (Chart)

This tab presents efficiency of all patterns that were found for a specific symbol. 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 can be seen using number or percentage values. To switch between these two options use the Unit drop-down list. It may be very important especially when overall occurrences number for a given pattern is fairly low.

Additionally you may compare statistics measured for two different period length, that is 5 or 10 candles. To switch between these two options use the Testing period drop-down list.

Please note that the efficiency statistics can be filtered in many ways. For example, you may be interested to see only statistics for bullish patterns. To do so click on the funnel symbol in the Forecast column and set a required value.

Patterns Occurrences by Date

In this tab, we can see all patterns occurrences for a given symbol, each displayed in a separate row. We can see for example how every single pattern occurrence performed. Two previous tabs (Patterns Occurrences and Patterns Efficiency (Chart)) are calculated based on this data.

Please note that the table can be filtered in many ways. For example, you may be interested to see only bullish patterns. To do so click on the funnel symbol in the Forecast column and set a required value.

Basic Candles Occurrences

In this tab you can see how many particular basic candles were detected by the application for a particular symbol. The tab uses the same approach as the Patterns Occurrences tab.

Report

Report tab is summarizing statistics for a given symbol.

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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.

Group Statistics is composed of six tabs:

  • Patterns Occurrences
  • Patterns Efficiency (Chart)
  • Patterns Efficiency (Details)
  • Basic Candles Occurrences
  • Symbols
  • Report
Patterns Occurrences

In this tab you can see how many patterns' occurrences were detected by the application for all symbols within a given group. On the left, there is a pie chart where every piece is reserved for a different pattern. When you click directly on the chart, an appropriate row from the list on the right will be selected. When any item from that list is clicked, then the appropriate pie chart piece will be enlarged.

Please note that the occurrences can be filtered in many ways. For example, you may be interested to see only statistics for bullish patterns. To do so click on the funnel symbol in the Forecast column and set a required value.

Patterns Efficiency (Chart)

This tab presents efficiency of all patterns that were found within a group of symbols. For example, if the given symbols group has 25 occurrences of Bullish Engulfing pattern, all of them are grouped, and efficiency statistics is calculated for them.

Efficiency can be seen using number or percentage values. To switch between these two options use the Unit drop-down list. It may be very important especially when overall occurrences number for a given pattern is fairly low.

Additionally you may compare statistics measured for two different period length, that is 5 or 10 candles. To switch between these two options use the Testing period drop-down list.

Please note that the efficiency statistics can be filtered in many ways. For example, you may be interested to see only statistics for bullish patterns. To do so click on the funnel symbol in the Forecast column and set a required value.

Patterns Efficiency (Details)

This tab presents how patterns efficiency is spread out among symbols and patterns. It may be useful for example when we want to see which patterns and for which symbols within the whole group are performing best. Alternatively using this tab we can eliminate the patterns and/or symbols which are not performing well.

Every pattern and symbol are grouped into 4 rows block, presenting its efficiency.

Basic Candles Occurrences

In this tab you can see how many particular basic candles were detected by the application among all symbols for a given group. The tab uses the same approach as the Patterns Occurrences tab.

Symbols

This tab lists all symbols within a group. It happens that not all symbols within a group contain an equal number of candlestick bars. Then it may be useful to see, for example, how many candles and within which period were scanned for each particular symbol.

Report

Report tab is summarizing statistics for a given group.

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Exporting statistics to external files

Symbol and group statistics can be exported to external files in the following formats:

  • Microsoft Excel (.xslx)
  • 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 formats, 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 text files creates multiple files.

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Backtesting

Introduction

Note that backtesting module is not available in CandleScanner Basic edition.

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. 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 parameterized, i.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 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.

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Backtester screen organization

In order to open backtester screen click HOME » Tests button on the ribbon bar. New backtester window behaves differently than other window types (e.g. price chart window or statistics window). Namely the tool windows, i.e. groups, symbols and its properties are not visible. The reason for this is that groups and symbols can be selected within the backtester window directly.

When test window is opened, group window, symbol window, and properties window cannot be visible. This is normal behavior.

Backtest window is composed of three tabs:

  • Settings. In this screen, you can set all details for a test you want to perform.
  • General Results. High-level results from the backtesting. This is especially useful if during backtest parameter(s) optimization process was performed, and we want to see differences in performance between different parameters sets.
  • Detailed Results. Detailed results for a specific set of parameters. We can track here every single transaction.
Figure 1.

Figure 1. Backtest module.

You can create multiple test profiles via BACKTEST » Settings » Backtester Settings button on the ribbon. Every profile specifies exact entry and exit conditions which are used when tests are being performed. Each aspect of these settings is described directly on the screen.

Test profile has a great impact on the output from the backtester. For example setting a very narrow Stop Loss level may cause that during simulation, trades will be closed too often on Stop Loss order generating losses. On the other hand using very wide Stop Loss may cause that losses will be too big to be compensated by profitable trades.

To save your time, CandleScanner helps you to find optimal values for parameters used in exit/entry conditions.

Typically depending on your expectations and markets you may need several testing profiles.

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Settings tab

In this screen, you can initialize a backtest. Following details need to be specified:

Test profile in the Current Settings field. To add/modify/delete profiles use the BACKTEST » Settings » Backtester Settings button on the ribbon. Test profile used during backtest has a great impact on the results.

  • Test period. You can either specify that a backtester should use All Available Quotes or a specific From/To dates.
  • Position. In CandleScanner, you can run backtest for one pattern at a time. Bullish patterns are opening long positions, whereas bearish counterparts are opening short positions.
  • Symbols to be tested. Although you cannot perform tests where several patterns are used at a time, you may run one test for multiple symbols at one time. Click the Group list to select symbols group you want to test. Symbols contained in the group will be displayed in the Available symbols list automatically. At least one symbol has to be selected for testing (use <, <<, >>, > buttons to move symbols between Available symbols and Selected symbols).
  • Periodicity. Depending on the selected symbols group, you may specify the candlestick periodicity to be used during test. Every test may be performed at only one Interval at a time.

When all above details are set accordingly to your needs, press Execute button to perform the test. Test results are presented in the subsequent tabs, that is General Results and Detailed Results.

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General Results tab

Because in CandleScanner you may use many backtest parameters at one run, in this view you will find aggregated results for all parameters sets. Every symbol is presented in a single row.

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Detailed Results tab

Detailed Results panel is divided into three panels:

  • Parameters. In this table, every symbol and parameter set is displayed in a single row. In other words, you can easily see how a particular parameters set works for a given symbol.
  • Trades list (by selected parameter). In this table, you can see all transactions and its details for a symbol and parameters set selected in the Parameters panel.
  • Transaction Chart. In this panel, you can see the transaction selected in the Trades list panel presented on the chart.

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Technical analysis

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 of 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.

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 the Edit menu item.

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Introduction

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:

  • 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.
  • Technical indicators. Indicators 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 to 100. If this indicator was superimposed on the candlestick chart, for example on the EUR/USD FX rate, it would then "flatten" the candlestick pattern rendering it impossible to discern any patterns.

Note that technical analysis indicators are not available in CandleScanner Basic edition.

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Working with technical analysis indicators on the chart

CandleScanner can open up to three panels dedicated for technical analysis indicators (called I1, I2, I3 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 are 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 technical overlays group (e.g. Simple Moving Average, SMA, of price). It is not possible to add on this panel other indicators to avoid problems with different scales (e.g. Average True Range, ATR). You can add more than one technical overlay at a time to this panel, however. For example, you can put Bollinger Bands, and two SMAs with different parameters.

On the indicators panels (I1, I2, I3) 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 example, you can put into panel I1 Stochastic %D and RSI because they share the same scale. You cannot add there however in that case ATR.

Figure shows all possible panels visible:

  • price panel (P)
  • volume panel (V)
  • first indicators panel (I1)
  • second indicators panel (I2)
  • third indicators panel (I3)
Figure 1.

Figure 1. CandleScanner 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 V), 1-3 indicators panels which can be hidden via VIEW » Panels » {I1, I2, I3}. Please note that volume panel can be shown only if the underlying data contains volume quotes.

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.

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Adding 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.

Figure 1.

Figure 1. Indicators are split into three major functional groups.

Please note that every indicator has its list of parameters and can look differently.

Figure 2.

Figure 2. The typical window for adding/editing technical analysis indicator. On the figure, an example showing Stochastic %D indicator.

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Hiding indicators on the chart

 

Figure 1. Hiding indicator on the panel (Hide item). Notice also Edit and Remove items.

Figure 1. Hiding indicator on the panel (Hide item). Notice also Edit and Remove items.

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 put it back use the Unhide option.

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 the Hide menu item.

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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 of indicators which are currently on the chart.

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 the Remove menu item.

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