Trading Tools: Autochartist™ Chart Patterns: How Does It Work?

Simply click the links below to learn about the various benefits of Autochartist™

• Save time with Free Price Pattern Alerts*
• More than a Pattern Alert System: Watch Trade Ideas Unfold
• See Potential Profit Targets in Advance
• Get a Heads Up! See New Emerging Patterns
• Automatic Alerts for Fibonacci Patterns Now Available
• Find Potential Entries, Exits and Profit Targets

Save time with Free Price Pattern Alerts*

Autochartist™ automatically scans the charts of all GFT's currency pairs and CFD markets to find high-probability patterns in price movements. As it finds these patterns, Autochartist™ displays a pop-up alert to signal you of new potential buy and sell opportunities.

Simply clicking on one of the alerts reveals the Autochartist™ pattern screen, which not only marks newly identified patterns, but also helps you determine the characteristics of those patterns to help you identify potential profit targets.

Because Autochartist™ recognises so many patterns, the program is separated into two main pattern screens, each represented by two main tabs within the program.

The first is the standard pattern view tab, which displays basic patterns, such as flags, pennants, channels and wedges. The second, the Fibonacci Patterns tab, displays patterns, such as the butterfly and Gartley – patterns exclusive to GFT – as well as the ABCD and three-drive patterns. Autochartist™ also identifies three-point Fibonacci retracements and extensions to help traders identify patterns that may be evolving. Learn more about all of the patterns Autochartist™ identifies by clicking here.

More than a Pattern Alert System: Watch Trade Ideas Unfold

Using the standard pattern view, you can spot completed patterns in the primary screen for determining breakouts and price movements that result in new trade ideas. If the pattern has experienced its first breakout, or an individual price movement that breaks the support or resistance levels, it may be a confirmation of the pattern direction and an indication of its strength.

You can easily determine the breakout strength using the characteristic list for each pattern – a box that is located to the right of each pattern reveals additional information about the pattern configuration. In addition to seeing the strength of the potential breakout, you also see important information, including market direction and specific qualities – such as uniformity, clarity and the initial trend. While this may seem like a lot of information, Autochartist™ simplifies it all with uniformed colours, simple bars to signal strength quality and filtering and searching capabilities.

See Potential Profit Targets in Advance

A primary benefit to the completed pattern display is the forecast area on the chart. This area represents the target price zone (forecast to and forecast from), or where Autochartist™ anticipates the potential market move. Combined with your own pricing research, you can see that this type of analysis may help you determine where you want to enter or exit the market and collect your potential profits.

In this example, Autochartist™ detected a completed Continuation Triangle pattern in the AUD/USD chart.

It shows the breakout level, quality of the pattern, direction of the trade, and most importantly a forecast from 0.7230 and a forecast to 0.7250

Get a Heads Up! See New Emerging Patterns

In an emerging pattern, an initial breakout has not yet occurred. You may already know that traditional chartists advise traders to enter a trade based upon only completed patterns when making a trading plan. However, knowing which patterns may be emerging can help you prepare to trade, should a breakout occur.

In this example, Autochartist™ detected a Continuation Falling Wedge pattern in the EUR/USD. It only shows select qualities of the pattern.

Autochartist™ displays information about the pattern in the emerging pattern matrix and, when you double-click a row in that matrix, you can view the chart with the emerging pattern. This built-in feature is a simple way to be notified of patterns that have not yet completed, but could be watched more closely as prices unfold, alerting you of potential pattern setups and new trade ideas.

Automatic Alerts for Fibonacci Patterns Now Available

With Autochartist™, you also get software that helps you see Fibonacci patterns, which are automatically detected from GFT's price charts.

Autochartist™ identifies three-point extensions and retracements, ABCD patterns and, exclusively for GFT: butterfly and Gartley patterns.

If you're not already familiar with Fibonacci ratios and patterns, you should know that many traders have found they offer high-probability entry, exit, risk-management and profit targets using support and resistance levels.

Find Potential Entries, Exits and Profit Targets

As with standard patterns, Autochartist™ also rates each Fibonacci pattern based on a set of qualities. Generally, the higher the rating, the more reliable the pattern may be. Autochartist™ makes finding this information easy because you can reveal more about each pattern, including price symmetry for measuring how closely the identified pattern matches a standard Fibonacci pattern, and time symmetry for measuring how well each pattern develops over time; both of these are important components for validating the pattern.

When you click on a completed pattern alert, a yellow starburst appears on the right, signalling it's the newest, completed pattern.

These characteristics, combined with the Fibonacci ratios that appear on each pattern, help you automatically see a list of potential entries, exits and profit targets based on the identified ratios and price points. In addition to the GFT exclusive patterns — Gartley and butterfly — you'll be alerted to time-tested patterns for bullish and bearish ABCDs, three-drive patterns as well as 3-point extensions and 3-point retracements.

Learn the advantages of these patterns by clicking here.

Learn the basics of these patterns and definitions by clicking here.