Hi,
I have an idea for a useful tool. The benefit will visually estimate when a breakout is likely to occur using past performance data to input into the tool once a particular chart pattern has been identified and confirmed. For instance, Bulkowski has quantified likely percentage zones of patterns where a breakout may occur based on his study of the pattern history (this was covered in CMT curriculum). This zone data can be utilized as well as the start and end (4 total data points). To illustrate what I am describing, please see below:
The green trend lines are outlining a pennant pattern that I manually drew, this is not part of the tool just personal observation. Now, the red line would be the horizontal percentage measure tool that will show 1) a starting point (which represents 0%) and 2) an ending point (which represent 100%); showing 0% and 100% on the screen is just for example, they dont need to be seen. Lets say this type of pennant has a tendency to breakout once the pattern is 65 - 80% complete (I don’t have the actual data in front of me , just a guess), there would be two further data points manually added to the tool: 3) start of zone/percentage and 4) end of zone/percentage. The tool would calculate and know where to display the percentages based on bars or calendar settings once start and end percentage zone is entered and the 0% and 100% range has been determined by two mouse clicks. Showing a shaded zone for a prediction of a breakout is handy and also having the dates (and/or time if intraday) of the zones is good too.
Jeff
