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This is the instruction manual for Patternz, copyright © 2007-2011 by Thomas N. Bulkowski. All rights reserved.

The Patternz software is shareware, provided free of charge without any usage fees. It does not connect to the inter net, and it should run with Windows 3.11 or higher, but it does not work with many Vi sta setups and there are NO plans to make it compatible. **************************************************************** The program does NOT issue buy or sell signals. Only you can make a trading deci sion. How you trade a stock, or if you should trade a stock, is entirely up to you. **************************************************************** See the readme.txt file that comes with the program and the website http://ThePatternSite.com/patternz.html for additional help. This manual covers the following topics: INTRODUCTION GENERAL HELP ABOUT FORM BOOKS/WEBSITE FORM CHART FORM Additional tips CHART PATTERN INDICATOR Patternz Limitations Setup Panel Controls FILE FORMAT FORM FORECAST FORM LICENSE FORM LIST FORM Trading setups MAIN MENU FORM PATTERNS FORM SETUP FORM SYMBOLS FORM TELL FORM ================ INTRODUCTION ================ The Patternz program finds chart patterns in securities automatically. ThePatter nSite.com has a Tour which illustrates the main features (see the patternz.html page), so read that to see if this program has the features you are looking for. The Patternz program does NOT download stock symbols (individual stock files end ing in .csv or .txt). You have to do that yourself. A free quote downloader is available on ThePatternSite.com on the patt ernz.html page, but it requires a change to the File Format Form in this program. This is explai ned on the website, with pictures. Once you have the stock files in a folder, tell the Patternz program where to fi nd those files (it's easiest to place them in the folder where Patternz.exe resides). Use the Drive and Files controls on the Main Menu to locate them. Once located, the .csv or .txt files will appear automatically. You can then select a file and Cha

rt it to find patterns or use the List command to find them. Details of how to do this is explained bel ow, so keep reading (see FILE LOCATION in GENERAL HELP below). That is all there is to it. There is no need to build a watch list of files or a security watch list. Each stock symbol should have its own .csv or .txt file, using daily quote data. The program will automatically show these files on the Main Menu when the program starts. The remainder of this docu ment discusses the various Patternz controls and how to download your stock files. ================ GENERAL HELP ================ HELP The black help window at the top of each form shows context sensitive help when you TAB to the different controls. Any control surrounded by a red border means pressing the ESC (escape) key is the same as activating the control. Any control surrounded by a green border means it will activate when ENTER is pressed. Controls with an underscore can be reached/activated by holding the ALT key down and pressing the underscored letter. To quit the program click Exit from the main menu (menu bar, upper left) or click the X box in the upper right. ASCII FILES This program reads only ASCII files in the comma (.CSV) and tab (.TXT) formats. Those are the only files that will appear in the list box. The contents of each ASCII file comes in two flavors. The first flavor has the first line showing the column format of the file. In other words, you should have something like 'Date, Open, High, Low, Close, Volume, Adj. Close*' in any order, but the file must contain date, high, low, and close, spelled as shown. The 'Adj. Close*', open, and volume columns are optional. The asterisk is optional and upper or lowercase is fine on the column names. This is the format that finance.yahoo.com downloads them into Excel. The second flavor does not have the first line showing the column format. You specify the format from the File Format menu option on the main menu. See the File Format Form below for more information. This program only reads (not writes) information from those ASCII files, so you will need to update them yourself. Most finance programs have an export option that allows you to save a stock file in the ASCII format with data separated by commas or tabs. If it does then this program can probably read them in. See the File Format Form below for more information. WARNING: Patternz can only use data associated with ONE ticker symbol per file. In other words, you cannot pack data for five stocks into one file and expect Patternz to work. It won't. It does not support intraday data either. TO KEEP THE PATTERNZ PROGRAM RUNNING FAST, KEEP YOUR DATA FILES SHORT, say, no longer than a year or two worth of quote data. Patternz must read in the COMPLETE file before using it, so long files will take longer to load and that c an siginficantly slow the program. FINANCE.YAHOO.COM WEBSITE

If your finance in the comma or other) website. the files and I

software doesn't have an export option to save ASCII files tab delimited format, you can get them from the yahoo (or You don't have to use this website, but I've tested it with know it works for residents of the U.S.

Go to the finance.yahoo.com website, type in the stock symbol of your choice, click Go, and on the left you'll find 'Historical Prices.' Click on that. Page down the list of prices until you see 'Download to spreadsheet.' Click on that. Excel will load with the stock data transferred into the spreadsheet (or the information may be saved to disk, depending on how your browser is confi gured). Click 'Save as' from the File menu and at the bottom of the dialog box, select 'CSV (Comma delimited)' or 'Text (Tab delimited)' as the 'Save as type.' For the filename, enter the stock symbol and save it to the Patternz folder where the program can find it later. The quotes are delayed, so keep that in mind. You can also use the free quote downloader to build files acceptable to Patternz . Read ThePatternSite.com instructions on the Patternz page for more information. Using the quote downloader requires a change to the File Format Form, which is e xplained on the website, with pictures. FILE LOCATION Place your stock files in any folder you want but it is easiest to locate them i n the folder where Patternz.exe resides. That way, you should not have to tell the program where to find them. Any files with the .csv or .txt extension will appear automatically providing they were there before you ran the program. If the files are in the folder, but Patternz does not list them (as in the case when Patternz was running and you filled the folder with files), exit the Patter nz program and run it again. The files should appear automatically. If they do not, then tell the program where to find them. Select the drive, directory (folder) and files to view from the list boxes on the Main Menu. I know, the directory box shows only 8 characters instea d of full path names, but hey, this software is free and you get what you pay for. The 8 character limitation makes a directory like 'documents and settings' appear like 'docume~1' so do your best. Once the path to the files is setup, the program will remember it so you won't have to dork with it. Just select the files you want to view and click Chart or List. ================ ABOUT FORM ================ This form does nothing at all except draw a pretty picture. And show my copyright notice. In case you missed it, it's: Copyright © 2005-2011 by Thomas N. Bulkowski. All rights reserved. The following describes the form's controls. Border Width This controls the thickness of each circle. Circle Offset This controls the 3D appearance of each circle. Done

I use the money to pay for charges associated with th e website.co m automatically with a code passed to them. Amazon pays for the referral at no additional cost to you. The ASCII file(s) you selected on the main form are read in when needed. After the stock is displayed. When NOT over a price bar. double click the left mouse button to show the price information. then click on Patterns and make sure you have selected chart patterns to search for. Max Circle Size This controls the size of the circle. ================ CHART FORM ================ This is the form where the action takes place. While on a price bar. RIGHT CLICK and drag the mouse to draw a trendline. Click on a picture of my book on the website and that will take you to Amazon. then the program found no chart patterns for the selected dates or time scale (daily or weekly). While on a price bar.This unloads the form and returns you to the main menu. Any found chart patterns will appear on the screen. the pattern recognition software runs. Speed This controls how rapidly each circle appears. . Moving the focus to the list box (lower left of screen) will expand the box. then please do so through my website. Click the Done button to return to the main menu. you should have no problem unless they change the format. Click to remove. Click Graph or adjust the chart borders to redraw the chart and erase the trendl ines. If you use Amazon to buy ANYTHING. ====== Additional Tips ======= Hold the left mouse button down over the chart to show crosshairs. If a problem occurs. This feature helps when Find Candle is checked and you want to read the contents of the list box. Mov ing the focus away (by pressing Tab or clicking on a different control. If that doesn't work. If you use files from the yahoo website. and then return to the chart form. If that still doesn't work. hold the right mouse button down for a momentary glimpse of the price information. the box will shrink. such as the chart). ================ BOOKS/WEBSITE FORM ================ This form lists the website address and discusses the content of my books. the program will tell you about it or an error message will appear in the black help window at the top of the form. If they don't then make sure to check the 'Show' text box.

but too much and the program will warn you about the chart overflowing or the screen turns to mush. for example). Clicking on the list box expands it's . Right mouse click on any two price bars where the cycle starts and ends. Bar Charts Uncheck the Candles check box to show a regular OHLC bar chart. By default. Daily/Weekly This controls whether the daily chart or weekly chart appears. For countries outside the U. then enter a more recent date. If that's the case. Find Candle When checked. check the toolbar then the palettebar and drag & drop the color you want onto the OHLC bar. It may help to have only a few bars displayed on the chart (change the begin or end dates) so they appear fat.. You can click on the right (forward) and left (backward) arrows to accomplish the same thing. You may find it helpful to uncheck Volume (so volume bars won't trigger the list box to show new candle information). To change the color of the bars. Begin and End dates Select the beginning and ending dates to examine and then click graph.Here's what each control does. highlighting c ycle repetitions.S. you might want to select dates closer together so the candles won't appear so compressed. Arrow buttons Press ENTER to move to the next stock or press the minus key (-) near the keypad to move to the previous stock. but they appear better on the weekly scale. or volume bar will display candlestick tips in the list box on the lower left of the screen. Use the toolbar then palettebar to change the candle colors (drag and drop). Click Graph (or refresh the chart) to remove the grid lines. moving the mouse over a price bar. the program selects the current date and one that will display as much data as it can without a scrollbar appearing. Patternz can highlight these repeated highs and lows when you click the cycle button. The program will draw a vertical grid starting from those two points. Cycles Stocks sometimes form cycles. candlestick. Candles Check this to show a candlestick chart and uncheck to show a bar chart. the date format may appear weird until focus moves to the date field. Clicking it is the same as pressing Escape. I don't have a fix for this and it's cosmetic anyway. minor highs or lows spaced consistently across the chart. Some chart patterns are meant for the weekly scale (pipes. If you have candlesticks enabled. Up to 5 years of data will be displayed on the chart. Done This returns you to the main menu. I'll find them anyway on the daily scale and show you. The program will return to the main menu when you've come to either end of the file list you selected. It may help to have only a few bars displayed on the chart (change the begin or end dates).

" . The next one would be 2. the numbers are .61 8 then 4. You can click on old swing high and low then click phi and see how the turning points line up with the phi extension turning points.618.' and a corrective retracement co mes next. Graph This redraws the screen. Patterns This runs the Patterns form so you can select other chart patterns or candles to search for. In the other direction below 1. "If prices fail to continue beyond a phi level. and the list box will return to normal size. or you want to clear the screen of trendlines and suc h. A failure at any level implies a return to the previous level. Moving focus away from the list box (by pressing Tab or clicking on anothe r control). The price difference between two turning points becomes the basis for plotting lines 1. there should be 0. a new set of phi levels is plotted.853.618 then the sum of the prior two multiples. When checked. we understand that they have completed a component cycle or 'wave.382 and 0. Each time phi is challenged and overcome. The multiples be gin at 1 then 1. and 6. each time the market cycle changes direction.size.236. but the figures in t he article do not show them. You'll only have to click this button if you change the beginning or ending dates.618. From the article. two small red circles i dentify the two turning points. Horizontal lines are drawn at these and additional price point s.236 and so on). Regardless of the cycle siz e. based on turnin g points near (before) the most recent date. Phi extensions are based on price movements in propo rtion to 1. The phi extension feature is derived from an article in the August 2004 issue of Stocks. Phi Click on two major price turning points then click Phi to show possible future t urning points. Futures & Options magazine. Log When checked. a logarithmic scale is used to chart information. When not checked.618 value squeezed in the series (and . The phi extension levels represent possible future turning points and are surpri singly accurate. The Setup Form has a check box to do this automatically. they way is open for a move to the nex t level. a linear scale is used. For the progression to be proper.618 Fibonacci multiples above and below the two points.

and so on will be erased. The values also appear in the black help window at the top of the screen. If price pierces a level.In other words. The help window displays the percentage distance from the current close to the nearest support or resistance area and warns if a throwback or pullback is likel y. the most recent date will be used) and the program will compute the 1-month volatility stop for both up and down breakouts. expect a move to the next level. Stops The message box that appears tells where a volatility stop and minor high or low stop should be. and then click the retrace button. Click OK and three lines will appear. 50% and 62% Fibonacci retrace of the swing move. set the chart's begin and en d dates far apart -. each phi level becomes support and resistance. The color of the line is determined by the FIRST occurence of a peak or valley. See that form for more details. Any trendlines. expect price to return to the pr ior phi level.the more lines the merrier. but the lines help determine where price will find support and resistance. Click on a price bar. It may not. Pretty cool. Unfortunately. Retrace This button shows three Fibonacci retrace levels. so e ven though a peak (red line) appears.com) and I'll consider adding the enhancement. Where new phi levels meet previously drawn phi levels. If price is repulsed. Redrawing the screen erases the lines (such as clicking the Graph button). expect price to stall or reverse there. See that form for more information. the program does not keep old phi levels because they tend to crowd the screen. valleys are included. then send me an em ail (tbul@hotmail. corresponding to a 38%. Forecast This button loads the Forecast Form to predict tomorrow's close. Where lines congregate. a swing low and swing high. A message box appears that describes the three retrace values. 50% and 62%) to anything you wish. huh? Use the Setup button to change the retrace levels (38%. and so on. Press again to clear the chart. Show Check this to show chart patterns and uncheck to erase them. Both peaks and valleys are included in the count for support or resistance. If you want this capability anyway. For best results. Redraw phi levels at turning points. RIGHT Click on two price bars. starting along minor highs (red) and lows (green). or not (in which case. retrace lines. You can change how Patternz locates SAR by using the Setup button. SAR Press to show lines drawn. . calculate pivot points. a more substantial support or resistance zone will appear.

89% 4. 0. Turning off the text can make the screen display faster. SO DON'T DEPEND ON THEM FOR ACCURACY. Volume ticks do not carry Lyme disease. Symbols Shows a form that explains the text and symbols that appear on the chart. See the Tell form for additional help. When price is unchanged. downward breakouts) or to give you a volatility for optimum performance. Tell RIGHT CLICK on a price bar then click Tell.0x multiplier gives the largest dollar increase while maintaining an acceptable loss level.61% 5. A tall price bar means a minor high or minor low is within plus or minus 1 day of occurring 66% of the time.0x = -16. The Tell form appears which will explain the various chart patterns found on the selected date.16% 6. Vol Tick Check to show tick marks along the volume scale. Here's the average percentage loss using a 1-month look back (22 trading days) and various multipliers of the volatility using the high-low method. the color of the bar is the same as the prior day.0x = -7. Use the PaletteToolbar to change the volume color.I compute the high-low range of each day over the multiply by two and add it to the high price (for subtract it from the low price (upward breakouts) stop.0x = -4.0x = -18. See the Setup form to turn on/off the display of symbols along the top of the form. A volatility stop is useful to avoid being stopped out on normal price fluctuation and for straight-line price runs where there is no minor high or low to hide behind.89% 1.47% 2. The average true range and standard deviation methods were tested and found to be inferior to the high-low method.0x = -10.0x = -13. Volume must be checked for volume ticks to appear. The minor low appears as a red line and the volatility stop as a blue line. Vol Check to show volume along the bottom of the chart.5x = -3.82% The numbers show that as the multiplier of the volatility increases. corresponding to the chart pattern start and end days. Green volume means price closed higher. I save the changes. The Minor high stop does not appear on the chart as a line.29% 1. The 1-month look back and two multiplier were tested against actual trades as were the average true range and standard deviation methods. THE RED AND BLUE LINES MAY NOT EXACTLY MATCH THE STOP PRICE LEVELS.96% 3. The 2. so does the potential loss. The 1-month volatility uses 22 trading days last month. Red volume means price closed lower.5x = -6. Stops based on the nearest minor high and low are also calculated. . The ticks allow you to better see the volume trend within the chart pattern. Ticks will not appear if volume is not checked. Tall Bars Check to show unusually tall price bars on the chart with a colon (:).

Horizontal grid Draws horizontal lines at intervals I haven't figured out how to change. the position of which seems almost random. uncheck the data editor line. the higher one means the point is hidden from view. Vertical grid Draws vertical lines. so I don't save the setting. This information IS saved. Bar graph You can play around with this and make the chart look really strange. Series 1-6 are for low. Hold the left mouse button down and drag the cursor across the price bars. when the mouse pointer hovers over it. up volume. high. Why you would want to do that is beyond me. Magnifying glass Zooms into the chart. click on the toolbar button again. Data changes appear on the graph but are not saved. but if you do. Hammer This is the cool one. down volume. You can change any of the four titles but the information is NOT saved. marker volume I save. However. . many of which I don't support. Double click to edit values. That tells how wide the price bars appear. including ones you won't see. starting on the left.ini f ile and start again. You can do all sorts of things with the chart. open. Each button. so don't think they start on a particular day of the month. Palette Allows you to change the fonts of any of the text items. Go figure. Scissors Copies the data to the clipboard. just delete the Patternz. respectively. I don't save many of the settings so what you do won't hurt you. Camera Copies the chart to the clipboard as a bitmap. Printer Prints the chart. Volume represents two columns (up and down volume). ======Toolbar Begins======== The following explains the function of the toolbar items. You probably won't break anything. Have fun. To restore the chart.Toolbar Check this to show the chart's toolbar. Play with it. I also save the logarithmic/linear scale setting for price. believe it or not! Use the patternbar to change the pattern of the price bars. To zoom out. tells its function. What I mean is that the chart is a 'cu stom control' and I have little control over the working of the toolbar items. Click on palettebar and use drag-and-drop to change the colors of the chart. AB box This shows the titles dialog box. None of the changes are saved. close. The data editor shows the chart data in a table format. The default is the semi-log scale (select the Scale tab/Secondary Y axis option button).

. it represents the breakout day. You can configure the patterns used in the test by clicking either the Setup or Patterns buttons. a triple top is bearish because price breaks out downward from that pattern. When that occurs. Thus. from start to end. there is a text box so you can limit the time in which a breakout must occur. A double bottom would be a bullish pattern. two methods are used. Every day that a bullish pattern exists (usually from pattern start to end) coun ts as 1. the indicator is a blue line with r ed and green vertical bars highlighting possible turning points in the market. To determine whether a security is bullish or bearish. Each day that a bearish pattern exists also counts as 1 (in a separate tally. the more securities the indicator uses in its search. Price within each p attern. In the case of a double bottom. if pric e breaks out upward first. Also. the better the results are likely t o be (that means you should highlight as many securities as you can on the main menu before entering the CPI form). expressed as a percentage. The totals of the bullish patterns are then compared to the total of both bullish and bearish patterns to form the indicator. After a test. expressed as a percentage: CPI = 100 * BullTotal / (BullTotal + BearT otal) The second bull/bear counting scheme is the breakout method. that m eans dates between the lowest price at the first bottom to the lowest price in the se cond bottom are counted as bullish. from pattern's end to the breakout. The indicator is a ratio of bullish patterns to the total of bullish and bearish patterns. is searched for the highest peak and lowest valley. price is se arched to find the first instance in which price CLOSES above the highest peak or below the lowest valley after the pattern ends. us ually from pattern start to end). or the breakout day on ly. After finding a breakout. Each found pattern is counted as bul lish or bearish from the start of the pattern to the end. an upward breakout is bullish and a downward breakout is bearish.================ CHART PATTERN INDICATOR ========== Theory The chart pattern indicator is a tool that shows when the general market may turn using the theory that few bullish patterns appear near market tops and more appear near market bottoms. Once found. Bullish and bea rish totals are counted depending on the radio/option button selected: from the start of the pattern to the date of breakout. Even though a triple top is supposed to be bearish. For example. The first finds a chart pattern and bases its bull/bear determination on the type of patte rn found. then the pattern is counted as bullish. based on the threshold settings.

for example. so you can determine h ow likely it is that a prior signal may change with additional breakouts. They are: narrow range 4 (NR4). If Patter nz keeps finding bogus rectangles. Thus. If you do not use enough securities. Counting the pattern from start to end or breakout is a way to capture the movem ents of the smart money. you will not get an accurate picture of the indicator. The downside of using this counting method is that patterns waiting for a breako ut to occur will not be counted until the breakout. How many is enough? I think at least 125 securities will give good results but i t depends on how many price patterns are found. Why? Becaus e the trend leading to patterns may be unknown. Oddly. then it is probably unlikely that additional counts w ill change the signal. not trading days. You can change the number of calendar days in which a breakout must occur or the pattern is thrown away. That buying and the buying patterns of other investors or traders creates the chart patterns that you see. ======Patternz Limitations=========== Flaws in Patternz may make the indicator unreliable. and four price do ji. The indicator is only as good as the chart pattern recognition system. narrow range 7 (NR7). I introduced a "Patterns must breakout with x days" line on the Setup panel. a sho rter date period may create MORE chart patterns than dates farther apart. regardless of whethe r or not it is selected. if the bull and bear counts are far apart. Since these are neither bullish nor bearish. The number is in CALENDAR days. When the data starts also determines what the indicator looks like. If they know good earnings are coming. what is a buy signal today based o n 100 patterns may change to neutral or even sell when 200 patterns finally do show breakouts. spinning top. gap. Information pasted onto the clipboard gives count totals. In other words. This prevents signals from long ago changing when old patterns f inally stage a breakout. they will be buying the stock before the announcement. for shorter dates. five patterns will always use the breakout method. Thus. the program uses the breakout method when one of these patt ern is selected. Finally.The reason to count bullish or bearish patterns in this manner is that the smart money knows to buy or sell a stock and does so over time. then the indicator results will be unreliable. To help solve this problem. a triple bottom may exist because Patternz cannot tell if the prior trend is up or down leading to the start of th .

I have programmed a second Factory button on the Chart/Setup form (go to the cha rt form from the main menu then click on Setup. Additional securities may be needed to plug the hol e. 2007 (about 10 months long). because the price trend is moving up into the chart pattern. but that will also include any market fi les like the S&P 500. the begin and end dates used. even if your setup is the same as mine. The Factory 2 button settings may work better for the CPI form and general pattern recognition . Since the securities scanned. You'll see Factory 1 and Factory 2 buttons). the chart patterns a nd candlesticks selected. Before clicking the Indicator button. make sure that only the data files you want scanned are highlighted in the Files list box on the main form. To duplicate my setup. If you see a horizontal blue line at 50. starting from October 19. and the price patterns selected. 2008). PLEASE NOTE: Since the results vary with the stocks under test. Dow Industrials average.e chart pattern. and method (breakout method or not) employed conspire to make it diffi cult for the indicator results to be replicated from one test site to another. IMPORTANT: The chart shown on the Indicator page of Patternz will likely be diff erent than the one on the website. Finally. you will have to test the indicator for your situation to determine whether or not it helps. and it uses data t hat has NOT been adjusted for dividends. the number of securities used in the test. Why? Because I use a different program to create the picture. I do NOT include those files when I run the indi cator. then no p atterns were found during that time. if you want an accurate picture of the market. Thus. Thus. In oth er words. you will have to configure and tes t the indicator for your situation. not ETFs or indexes. At the time of this writing (August 31. the d ata will be slightly different. and so on. causing an indicator signal on the chart to appear or disappear. the indicator may signal a buy on your screen but neutral or even sell on a friend's computer. then use Factory 1 or your own settings. follow the instructions on the website found at the link on the Patternz page. Basically. the trend is clear and a triple bottom may not be a " bottom" at all. then build a database of nearly all of the . For an earlier begin date. If not. I use stocks only. I use 561 stocks for the indicato r. You can highlight all of them by clicking the All button. Expect minor variations. you download a list of symbols that I use then make sure your setup is the same as mine by comparing the pictures on the website to those on Patternz.

too. And since they will likely grow each day. the Results panel will display. Before beginning an auto test. run the Patterns form (or click Setup) to select the patterns you wish to test. a blue . Once an auto test completes. the shorter the physical file. KEEP THE FILE S SHORT. Each pattern is examined for the best percentage gain and the best result is pasted on the clipboard. The Clipboard button copies the list box information onto the clipboard. Paste it into a spreadsheet or word processor if yo u want to save the information BEFORE clicking on the Clipboard button. they will load quickly. the test may take a long time to complete. will NOT help with speed becaus e Patternz must load the entire file before picking out what it needs. When you press Find.securities traded on the market (about 5. Files longer than about 2 years will slow the scan. Short dat a files load faster.000 securities). That way. The test will use the Breakout method because that's the only one that makes sen se when testing patterns individually. Data for the best p erforming pattern will be on the clipboard ALREADY. the bette r (but keep them at least 4 months long). a bullish pattern will show all g reen bars and a bearish pattern will show all red bars.000 to 6. Changing the "begin date" on the indicator form. Here is an explanation of the controls on the CPI form. I rec ommend at least 4 months of data but no more than one year. That will keep the program running fast. Begin date Use this to determine when the analysis begins. On the CPI form. change the begin and end dates to keep the amount of data short. If you can also trim the si ze of the data files (to about a year long). The more patterns selected. Thus. so k eep them short. Chart The security you chose in the list box appears and after a Find is completed. Otherwise. say a year's worth of data. Auto test The Auto Test button conducts a Find of selected patterns and then a threshold test. the Results button will ungray and you can click it to review the results.txt files and download a new batch that are a year long. the program will slow over time. Once an Auto test is completed. You can delete the . See the Breakout Method in the Setup P anel Controls section for more information. Since many patterns can be selected for auto testing . the longer the test will take to complete. the changed date will reflect in the chart or you can use the security list box to select a different security to update the chart.csv or . that will speed the auto test.

The threshold valu es. Paste the performance information into a spr eadsheet or word processor BEFORE clicking on the Clipboard button on the Results form. Results After an Auto test. The Clipb oard button copies . Done This returns you to the main menu. the program will determine the best buy and se ll threshold settings. Help This lists additional help. Nasdaq. the indicator will be displayed as a blue line below the security with re d and green vertical lines highlighting possible bearish and bullish turning points. Optimize When checked and after each Find. information related to the test is copied onto the clipboard for p asting into another program such as a word processor or spreadsheet. Patterns This shows the Patterns Form where you can select chart patterns or candlesticks to include in the test. You can use the data t o help back test the indicator. When you press Find. the changed d ate will reflect in the chart or you can use the security list box to select a diffe rent security to redraw the screen and update the chart. such as the Dow industrials. and daily pattern counts are included. the results are copied into a list box on the results panel and the best performing pattern is copied to the clipboard. In the chart. patterns selected. This is not necessarily the best for swing trading or other trading styles but it works well for buy-and -hold positions. You have to provide the data fi le. Find This begins the analysis. End date Use this to determine when the analysis ends.line representing the indicator appears along with red and green vertical lines representing potential market turning points. Clipboard After a Find. select one that best represents the general market. You will want to adjust the threshold settings for your markets. List box From the securities listed in the list box. The default thresholds are 35 (sell) and 65 (buy) and those settings seems to work well for US markets during 2007. or S&P 500. The chosen thresholds are the ones that show the largest percentage change.

a symmetrical triangle that shows price closing be low the bottom . Setup Click this to show the setup panel. select a chart pattern or candlestick from the list box and click the button to add it to the Candles to Test or Chart Patterns to Test list boxes. if you only include one bullish pattern. Best performing Check this to include only the best performing chart patterns or candlesticks in the test. it will be included in the indicator test. The following discusses the controls on the Setup Panel. you likely will see a chart filled will green (bullish) bars. To use. Once you select the patterns that will be used to test the indicator. Also. keep an eye on how often a pattern appears. how the pri ce pattern typically behaves is used. Click the Results button to access the Result panel. If you have three plentiful bu llish patterns and three rare bearish ones. Breakout See Pattern start in this section Breakout method The breakout method uses a close above the top or below the bottom of the price pattern to determine whether it is bullish or bearish. See Performance Range for more information. For example. meaning that there are an eq ual number of bullish and bearish patterns. Use the associated text box to determine what performance level you think is best. You'll have to play with the pattern composition to get things right. From there. Only chart patterns or candlesticks meeting or exceeding the value in the text box will be included in the test. ======Setup Panel Controls=========== The setup panel allows you to customize testing using candlesticks and chart pat terns. Otherwise. Use the controls to select the patterns used in the indicator test. Once added. The Results button will ungray only after an Auto test. It is important that the totals be equal. respectively. you can copy th e results onto the clipboard for pasting into another program. Add to Candle or Chart Patterns List This adds a price pattern to the list boxes for testing. the chart is likely to be covered in green bars (bu llish) because the bearish patterns do not occur often enough to balance the indicator. All Check this to include all chart patterns or candles in the indicator test. look at the totals for bullish and bearish patterns.the list box information onto the clipboard. For example.

Delete This removes a price pattern from the list box so that it will not be included i n the indicator test. Done Click this button to return to the CPI form. They are: narrow range 4 (NR4). Candles to Test This is a list box that shows which candles will be included in the indicator te st. Only the text boxes are reset. Please note t hat no candles are selected. Pattern to Add to Above List boxes This is a list box that shows all patterns not included in the Candles to Test o r Chart Patterns to Test list boxes. regardless of whether or not it is selected. and four price do ji. Help This provides additional help. narrow range 7 (NR7). more of them appear with upward breakouts than downward ones. highlight securities in the Candles to Test or Chart Patterns to Test list boxes (or both) and click delete. Factory: Chart Pats This resets the controls for chart patterns back to the factory settings. the program uses the breakout method when one of these patt ern is selected. the indicator count begins from pattern start to day of breakout instead of pattern start to pattern end when the breakout method is not used. Since these are neither bullish nor bearish.(the lowest low) of the pattern will signal a bearish pattern when using the bre akout method. To use. When the breakout method is used. gap. spinning top. Patterns This shows the Patterns form where you can select candlesticks or chart patterns . the symmetrical triangle will be bullish because. h istorically (found by testing). Chart Patterns to Test This is a list box that shows which chart patterns will be included in the indic ator test. Continuations only Checking the box adds chart patterns or candlesticks that act as continuations o f the current price trend to the associated list box for indicator testing. Five patterns will always use the breakout method. Factory: Candles This resets the controls for candles back to the factory settings. If the breakout method is not used. Clicking on a price pattern in the list and clicking the associated Add to Candl e or Chart Pattern List button will add the associated price pattern to the list for indicator testing.

The breakout method does not suf fer from this 'back fill' effect. I count as bull ish all days from the pattern start to the breakout as bullish (if pattern start is selected). If you enter a numb er. If pattern end is used. If you want to determine whe ther the market might be turning today. The number in the text box represents CALENDAR days. I like to think of these options as choosing different moving averages. The effect of the three are slightly different from one another. Using this method helps to prevent signals that occurred long ago from changing due to additional breakouts from old patterns. Using pattern end results in a smoothe r and more useful appearance. The trade-off is that a buy signal many days ago might change to neutral or even sell when using pattern start or pattern end. For example. The shor ter the moving average. then a breakout must occur within that time period or the pattern is discarded. When the breakout method is used. That's the reason I introduced these radio buttons. The text box help prevent this type of behavior. If that happens for many stocks. It may be that this additional bullish count will change a prior sell signal to neutral or a neutral signal to a buy signal. but the signals it gives are terrible. so you could choose your poison. If breakout is selected. Better signals occur with pattern start/end but t hey have this undesired side effect. I fill in t he dates from the pattern start. The longer the m . Switch to one of the other methods (pattern start/ end) for a longer term reading. the closer it hugs the price trend and the more likely you will get false signals. pattern end. breakout These are radio or option buttons. pattern end. This is a text box. not trading days. Thus. In short. if a chart pattern happened 5 months ago but the stock has not broken out of it's trading range until today (and assume an upward breakout). These bullish counts when coupled with the total of bullish and bearish counts make up the chart pattern indicator . then use the breakout method. If you use brea kout. You can use the options in combination for testing. the chart will likely appear with signal changes occurring frequently. old signals may change because of this. the signals from 15 days ago could change dramatically.for testing. This is because I mark all days from the pattern start/end to the breakout as showing a signal. or the breakout to the breakout after determining if the pattern is bullish or b earish. If you use 0 then no time limit is used. The pattern start tends to show the most timely signals. Pattern start. all of the days from pattern start to t oday will be market bullish/bearish. then the program will mark the pattern as bullish from the start to the breakout (giving 5 months of buy signals). if a narrow range 7 (NR7) pattern is used in the test and price breaks out upward. if a NR7 breaks out today and the pattern began 15 days ago (with pattern start chosen). then I count from the day the pattern ends to the breakout as bullish. For exampl e. then only the breakout day is used. Patterns must breakout within (Use 0 to turn off): x days.

The threshold values are automatically optimized after a Find if the Optimize ch eck box is checked. uncheck and then check the Show signals check box to update the chart. Adjust the threshold values to better highlight poten tial indicator turning points. Reversals Checking the box adds chart patterns or candlesticks that act as reversals of th e current price trend to the associated list box for indicator testing. Your markets and stocks you select to test will determine how successful the selected patterns will be. Show signals. That means you may see 25 buy signals followed by one sell signal then more sell signals. so keep that in mind. In other words. If you want to see what other threshold settings would look li ke. In such a case. red and green signals will display according to the associated thr eshold values. The values i n the boxes are optimized after a Find completes. use the Patterns button or other controls on the Setup Panel to add or remove patterns from the test. If not checked. You can always add additional patterns to the mix that might greatly improve performance. Values above a threshold of 65 will appear in green (bullish). all signals will appear. threshold When checked. Setups The group of buttons select various patterns that have shown promise during test ing. a red (bearish) vertical line will appea r. only ONE signal appears instead of a sea of red or green until a c hange in the signal occurs. For example. The check box makes the chart clearer by removing duplicated signals. Text boxes The two text boxes show the bearish and bulling threshold settings. patterns with performance equal to or above the number in the text box will be included in the indicator test. If you change the associated threshold values in the text boxes. ======End Setup Panel Controls=========== Show signal changes When checked. Stop Click this to stop the analysis. and so on. if the indicator drops below the 35 threshold. They will appear in the associated list box. the more lag is introduced. Also within the Setups panel are the factory defaults. The first signal is most important. Performance Range Use the performance range as a guide when entering a number in the associated te xt box.oving average. When the associated check box is checked. Refer to the Factory butt ons above for more information. enter a number into the text . you will only see one buy signal followed by one sell signal (and so on).

First. The chart will clear and then redisplay using the new threshold values. click 'Get Format. a format in which the first line of the file is d ata and not a header line (such as 'Date. any changes you make to the File Format panel assumes you are making changes to the Security Watch List. semicolon. Toolbar This shows the chart toolbar. you can access them with a minimum of fuss. The display is provided for your convenience. The MMM file. Select a drive. To check an existing format. ================ FILE FORMAT FORM ================ This form does two things. for example. File configuration The bottom left side of the form allows you to configure the program to read fil es that are in an unusual format. it allows you to configure the program to read files that are in an unusual format. Watch list The lower right half of the form allows you to save a file format with each watc h list. Use the file information shown as a guide to setting up the format. tab. but the program will skip unused columns. Click Get Format 2. WARNING: When you specify the column format and enable it.' and so on). If you want to change a security watch li st then 1.box then uncheck and then check the associated Show signals check box. That makes viewing securities easier. Open. Make changes on the File Format panel.' Once you click Get Format. You don't HAVE to locate your files using the drive/folder/files list boxes in order to change the format. Shown in the upper middle of the form is the partial contents of a file selected from the files list box. That way. right? Let me try again. you can group files with the same format in the same location. You will be prompted to save thos e changes when exiting if you haven't already. or space. may no longer be read in properly. That way. Set the column order using the controls described below and click 'Save Format' (NOT Save). The file information needs to be separated by a comma. if your securities have different formats. Second. . If you do not first press Get Format. then any changes made to the File Format p anel assume you are NOT making changes to the Security Watch List but ARE making chan ges to the files currently displayed in the list box above the File Format panel. and file. folder path. to display a few lines. it allows you to save the file format associated with each watch list. Refer to the Chart form for an explanation of the controls. Clear as mud. the program may no longer correctly interpret files with a header unless the column format is exactly the same.

Be sure to save any changes before clicking the Done button. IF PATTERNZ CEASES TO READ FILES PROPERLY. In the adjacent text box. Click Save to save changes. such . including a separator -. Open the file to your security and compare it to the format of the MMM file. open. Adjusted close This is an optional column. Click Save Format (not Save). If you use the 'Special' date format. Date The file must have a date column. Done Clicking this button will return you to the prior form. THEN EITHER CHECK OR UNCHECK THE Enable CHECK BOX. Default Click to restore the factory defaults.slash or dash)? Determine what the differences are and then setup the column format and date format as appropriate. WARNING: Only check this box if your files do NOT have the first line specifying the column format (date. Note the month and day order and no separator (/ or -) in the date. then your problem is with the file format. 2. you won't have to remember to switch file formats. enter the column number where the closing prices appear in the file. Click Save. If that file works.3. Check if the file has an adjusted close column and specify the column in which it appears using the adjacent text box. The Enable check box need not be checked for date format changes to become active. Close The file must have a closing price column. Make the changes on the File Format panel. If you want to make changes to the format of the files currently displayed (and not to a security watch list). Date Format Select the appropriate date option. The following is an explanation of the controls on the form. select the appropriate option matching the date format in the file. and so on). high. If your file has a special date format. I highly recommend that you place files with the same format in the same folder and then setup a watch list to access those files. enter the column number (1 being the first column) where dates appear in the file. then 1. The Standard format is something like mm/dd/yyyy but is specific to each country. Enable Check to use the selected format or uncheck to use a column format specified by the first line in the file. If you are still having problems then click Default and try charting the MMM file that comes with Patternz. This makes switching from folder to folder easier and once setup. Enabling to read a file in the wrong format will cause problems. Does your file have a header in the first line? Is the date format the same (mm/dd/yyyy. Most users will select the Standard option. In the adjacent text box.

then try to other Special date formats (like yyyyddmm). The column and date settings will appear to the left. Check if the file has an opening price column and specify which column it is using the adjacent text box. How many columns does the file use? Enter in the exact number of columns the file has. Get Format Click on a watch list shown in the above list box and then click Get Format. then clicking this button will automatically configure and save the Patternz setup fo r those downloaders. MAKE SURE YOU COUNT CORRECTLY. If the date format for your country is different than the default "Standard. Sometimes swapping them cures the problem. and changes associated with that watch list. but the number may not be correct. including unused columns. but sure to click Save NOT Save Format (unless you are setting up a watch list format). not a watch list. The program tries to count the columns according to the file displayed and warn you. Make any changes and then click Save Format (NOT Save) to save your changes to the watch list format. Use the Save button to save changes to a file. Volume This is an optional column. Save Format is only used for changes to the watch list format. Check if the file has a volume column and specify the column in which it appears using the adjacent text box. Files without an opening price will be set to the closing price. High The file must have a high price column. Do NOT use the Save button to save changes to a watch list. click Get Format to then click Save Format to save any Do NOT use the Save button to save here. A number of people have botched the counting and patternz ceases to run. enter the column number where high prices appear in the file. . enter the column number where low prices appear in the file. Low The file must have a low price column. Save Format After making changes to a watch list. Do NOT use Save Format to save file format changes.CSV will no longer work. click Save Format to save those changes. Please note that MMM. changes to a watch list. In the adjacent text box. After making changes." th en be sure to change it using the option buttons described above in Date Format.as yyyymmdd. In the adjacent text box. Select the watch list you are review and change format settings. Save Click to save file format changes. Setup MLDownloader of Yahoo/Google Downloader If you intend to provide data from either the MLDownloader or the free quote dow nloader. List Box The name of the watch lists appear interested in. since it will no longer be in the correct format. Open This is an optional column.

A number between 3 and 99 that you select is used as a 'look back' value in the linear regression formula. Since the forecast is based on daily price changes. Defaults Clicking this button restores all text boxes to the factory settings. Linear regression look back. Then I use linear regression on the forecasted and actual prices to determine a 'best fit' forecast. it is unavailable on the weekly scale.' I use an exponential moving average of the price changes to create the next day's forecast. Also on this form are pivot point calculations for the next day (daily scale) or week (weekly scale).================ FORECAST FORM ================ The forecast method is based on an article from the October 2006 issue of Active Trader magazine called 'Forecasting techniques. the program will use this value to make a forecast each time a new stock is displayed on the Chart Form and when the Test button is pressed on this form. The program will go through the range and calculate the accuracy and consistency of each forecast and chose the optimized look back value which is then placed in the blue linear regression look back box. The price forecast appears on both this form and on the Chart Form. The mean squared error (MSE) is a numerical description of the forecast's accuracy. The program uses the values in the blue boxes to create a forecast. The controls have the following functions. The default values were chosen after testing on 472 stocks ending October 2006. maximum number of days (To) and how many days to skip (Step) when searching for the best linear regression look back value. The forecast uses linear regression to improve the accuracy and consistency of the forecast. The result is displayed. Results are displayed on the chart as two lines. Pressing Tune-Up also may change the look back value. The standard deviation (Std Dev) is a numerical description of the forecast's consistency. Acceptable values range from 3 to 99 days with a step of 1 to 99 days. Low values for both numbers are best. one for the actual closing price and one for the forecasted closing price. The default settings were the best performing values resulting from those tests. When you place a value in the blue text box. You can enter values for the program to use or you can click Tune-Up and the program will select the best values to use for this security when calculating a forecast. Linear regression look back Linear regression is a fancy way of determining the best fit of a line drawn between points such that the distance from each point to the line is a minimum. Moving average (trading days) The program uses an exponential moving average to calculate the price forecast . Below that appear any predictions about tomorrow's price based on bullish or bearish chart and candle patterns. from-to-step Enter the minimum number of days (From). Done Click this to return to the prior form.

Highlight the securities in the list box that you want added to the watch list. and then click Add. listed alphabetically. press the Stop button. ================ LIST FORM ================ This form allows you to scan a list of files for price patterns. Patternz reads in the entire file even if you are searching just the last few days. A moving average is an average in which the oldest day is dropped when a new day is added to the average. A number between 2 and 252 that you select is used as the moving average in the formula. Read the end user license agreement (EULA) and click one of the option buttons. Tune-up Clicking this button causes the program to search for the best moving average and linear regression look back values for this security. the searc h begins. the program uses the values in the blue text boxes to create the next day's closing price forecast. Stop To terminate a tune-up. The controls on the form do the following. The program will go through the range and calculate the accuracy and consistency of each forecast and chose the optimized moving average which is then place in the blue moving average box. It places the best results in the blue text boxes and shows all results in the list box.for the next trading day's closing price. Be sure to have an adequate range set in the 'from-to-step' text boxes for the moving average and linear regression look back values. Pressing Tune-Up also may change the moving average value. from-to-step Enter the minimum number of days (From). Moving average. For the best performance. When you place a value in the blue text box. Acceptable values range from 2 to 252 days with a step of 1 to 99. and when the Test button is pressed on this form. ================ LICENSE FORM ================ The license information appears automatically when you first run the program. Add Use this button to add securities to a watch list. Once the file is read in. the program will use this value to make a forecast each time a new stock is displayed on the Chart Form. keep your data files short (about a year long works well). Test After pressing this button. The watch list makes it easy to save files for review at a later time. Selecting a few chart patterns to find will speed the search process. All When items populate the list box. the All button highlights them. You cannot use the program unless you agree to abide by the EULA terms. Begin . maximum number of days (To) and how many days to skip (Step) when searching for the best moving average.

or has no effect (=) on performance after the breakout.Enter the starting date to use when searching for chart patterns. but you may need to adjust the dates yourself in order for the chart pattern to appear. Bk Gap (breakout day gap) Click the button to search the highlighted items in the list box for breakout day gaps that help (+). hurts (-). I don't have a fix for this and it's cosmetic anyway. <Blank fields> Many of the fields on the list form will remain blank. the date format may appear weird until focus moves to the date field. If no items in the list are selected. the search will include ALL items in the list. for example). The program will warn you of this and will adjust the dates accordingly.. or have no effect (=) on performance after the breakout. Bk Volume (breakout day volume) Click the button to search the highlighted items in the list box for breakout day volume that helps (+). If no items in the list box are selected. Thus. otherwise. then the breakout day volume is compared to the 1-month volume average and a Hi (high) or Lo (low) appears. specify the beginning and ending dates far enough apart (like 4 months). the search will include ALL items in the list. For countries outside the U. just the selected items will be searched. Only ONE chart pattern will be shown at a time. depending on the state of the radio button directly above the Bkout button. If no items in the list box are selected. If performance has not been studied. If you change the beginning or ending dates. just the selected items will be searched. hurt (-). To identify longer chart patterns. Bkout (breakout direction) Click the button to search the highlighted items in the list box for either an upward or downward breakout. otherwise. otherwise. you may need to add extra time to . then a Y or N appears to indicate whether the chart pattern has a breakout day gap or not. just the selected items will be searched. Many times this works. When the form runs. need a price to be below or above the start of the chart pattern to establish whether it's a top or bottom. the current date is placed in the End text box and the Begin date is set to 4 months prior. Some chart patterns (double tops and bottoms. Details about the chart pattern will appear on the lower lef t of the screen. in turn.S. The chart form will load the associated file and display each highlighted chart pattern. I felt it was better to leave them blank than to distribute algorithms that might be faulty. the dates will not match and the chart pattern will not appear. Occasionally. the search will include ALL items in the list. Chart After the program finds chart patterns. Just click the right arrow button (on the Chart Form) o r press ENTER (or plus) to advance to the next chart pattern. minus (-) to return to the prior chart. This is because I'm lazy and didn't want to create algorithms to detect the breakout direction. signaling whether the breakout volume was higher or lower than the average. the program will remember the difference between the two and will set the beginning date appropriately the next time the program runs. If performance has not been studied. click the ones in the list box that inte rest you and then click Chart to view them.

Find Click this button to begin the search for price patterns. Daily Check the box to search patterns on the daily scale. The program will find all stocks with the last closing price greater than $5 and volume greater than 250. linefeed sequence. The highlighted rows will be copied to Excel. and then click the Excel button. Return to Patternz. Clipboard After the program finds chart patterns. enter an associated price or volume in the text boxes. Highlight the rows that interest you and then click Clipboard to copy them to the clipboard. the date format may appear weird until focus moves to the date field.S. and then click Filter. Height Click the button to search the highlighted list box items for height that helps (+) or hurts (-) performance after the breakout. While in Excel. make sure the spreadsheet is NOT maximized.. End Enter the end date to use when searching for chart patterns. Another way to do this is to click the menu item Window then Arrange and then Tiled. Select None in the combo box to NOT search for either price or volume. Get Retrieves a watch list and highlights the associated securities in the list box.the starting date in order for the chart pattern to be found. Excel Highlight rows in the list box and run Excel. Each row is tab separated and ends with a carriage return. Filter Select one of the price or volume options from the combo box to the left of the Filter button. The plus or minus indicators in the list box describe how similar . Any stocks matching the price or volume settings will be highlighted in the list box. the program has a default price of $5 and a volume of 250. This is not the same as a 'Restore Down' button associated with Excel. For countries outside the U. Delete Permanently removes the highlighted watch list item from the watch list. To do this. based on studies of chart patterns. The Begin and End dates allow you to specify any time period to study. provided there is associated data in each file covering those periods. the current date is used for the end date. I don't have a fix for this and it's cosmetic anyway. Done Click this to return to the prior form.000 share s. When the program runs.000 shares traded on the most recent day. click the 'Restore Window' button (which looks like two small boxes stacked on top of each other near the upper right corner of the spreadsheet. For example. you can copy the contents of the list bo x onto the clipboard for pasting into another program like Excel.

or = sign. The plus or minus indicators in the list box describe how simil ar configurations have performed in the past. Next Selected This button brings the next selected list box item to the top of the list. -. Click the Symbols button for a brief explanation of what each symbol means. Security Watch List Once you have found securities and you want to see the same ones tomorrow. be sure to begin with many highlighted items (click All to highlight every item in the list box. create a watch list that includes those securities. It's the big white box in the middle of the form. Since this is an ANDing process. and an equal sign (=) means there is no performance difference for the associated test. if the list box shows any trading setups. This will leave every item highlighted in the list box. At the top of each column is the 'test' associated with the +. click Undo Selected to restore the list. the search will include ALL items in the list. Delete or Get an existing one. Select a radio button and then click the button immediately below it to begin the selection process. Radio buttons (option buttons) The round buttons near the top of the form show the various search conditions that apply to the associated button directly below. List Box A list of any found patterns will appear here. just the selected items will be searched. The button makes it handy to find selected items in a long list of results. As you move from column to column. otherwise. See that form for more information. List name This is the name of the watch list. to search for.configurations have performed in the past. See the associated button for more information. if possible to do so (items on the last page won't scroll to the top). locate chart patterns using the Find button. If no items in the list box are selected. They may not perform as well in the future and should not be relied upon to base buy or sell decisions. Setup After a Find. The name is limited to 32 characters. Patterns This button displays the Patterns Form allowing you to select chart patterns. You can Add a new watch list of securities. highlight all items in the list box (or none and all will be selected fo r you) and . Scale Select the Day or Wk (week) radio button then click Scale to highlight securities with patterns found on the selected time period. If you make a mistake. See the associated button instructions. this button will select them. To use. To use. fewer and fewer list box entries will be highlighted that meet the conditions you chose with the radio buttons. This ANDing process allows you to narrow your search for investment ideas. for example). They may not perform as well in the future. A plus sign (+) means performance improves after a breakout based on studies of chart patterns. This program does not give investment advice. A minus sign (-) means performance is worse.

If no items in the list box are selected. but you might want to hammer on it twice just to be sure. respectively. then an Up (rising volume) or Dn (down. Vol Trend. otherwise. Stop After the search begins. If a pattern has not been studied. Beating on the stop button won't help either. Height. Vol Trend (Volume Trend) Click the button to search the highlighted list box items for the volume trend (using linear regression) from pattern start to end that helps (+) or hurts (-) performance after the breakout. Width. Bk Gap. A plus (+) or min us (-) means volatility helps or hurts performance. press Undo Selected to restore the highlighted items so you can continue the selection process. To search for a particular total. Width Click the button to search the highlighted list box items for width that helps . "Valid setup" mea ns the buy day is either the next trading day or it has already passed. ONLY ONE LEVEL IS RESTORED. Not all setups have been implemented. Undo Selected This returns the list box items to the highlighted state they were in before pressing one of the following buttons: Filter. Those with the word "setup" in the chart pattern phrase will remain highlighted. Weekly Check the box to search patterns on the weekly scale. so please be patient. Symbols Click the button for additional help on symbols that may appear in the list box. just the selected items will be searched. Sort Click this button to sort highlighted list box items by their TO date. The number to the right of the arrow buttons will change from the highest sum found to the lowest found. click on the arrow buttons located directly above the Sum button. Bkout. Then click the Sum button and all highlighted rows with the same sum will be highlighted. For more inform ation on each setup. Volatile Click to highlight securities with either rising or falling volatility. visit http://thepatternsite. Bk Volume. Scale. but it's only shown if a breakout can be detected.click Setup.com and look for trading setups. based on studies of chart patterns. If you press one of those buttons and it returns no patterns found. or falling volume) trend appears in the list box. I use the slope of a 5-bar linear regression line of the high-low price difference starting from 5 days before the breakout to determine whether volatility is rising or falling. A "potential setup" means the buy signal is still approaching. the search will include ALL items in the list. Volatile. Sum This is a total of the minus marks in each row subtracted from a total of the plus marks. click Stop to discontinue the search. WARNING: it may take several minutes to stop. and Sum.

Add Use this button to add securities to a watch list." means the chart pattern qualifies S O FAR. the search will include ALL items in the list. . go to the Patterns Form and check "Double bottom" in the normal manner. ====== Trading Setups ======= Version 4. To change ONLY the securities composing a watch list: 1. based on studies of chart patterns. just the selected items will be search ed. ================ MAIN MENU FORM ================ The controls have the following functions. All This button selects all files shown in the file list box. is entirely up to you. Patterns with the phrase. How you trade the stock. Highlight the name in the "Security Watch List" list box. otherwise. Only you can make a trading decision.html. "potential setup. To find double bottom trading setups. or if you should trade the stock. The plus or minus indicators in the list box descr ibe how similar configurations have performed in the past. The Setup button near the top of the form highlights those chart patterns with t he phrase "setup" in the chart pattern name. Select securities for the watch list and then click Add. they will be listed automatically. They may not perform as well in the future. Then go to the List Form and do a Find in the usual way (select t he stocks you want to search on the Main Form. The button makes it easy to separate trading setups from other chart patterns. but there are no plans to do so. or shows no performance difference (=) after the breakout. See "Setup" above. Other setups may be added in the future. This button is grayed until you type a phrase in the 'List name' text box. Change This changes the name of a security watch list and the composition of securities in the watch list. The program is NOT telling you to trade the stock because it does NOT issue buy or sell signals.com/DBTradingSetup.1T introduced trading setups with coding to recognize the double botto m trading setup discussed at http://thepatternsite. as in a historical price series.(+). If no items in the list box are selected. If any chart pa tterns qualify for the trading setup. hurts (-). "Valid setup" means all facets of the setup have been m et. "Valid setup" also applies to those setups that occurred previously. under LIST FORM. but the setup has not completed. and do a Find). enter the List Form.

2.CSV and . Once removed. Highlight the name in the "Security Watch List" list box. Click on a Pattern Watch List item and then click Get to retrieve chart pattern and candlestick settings. The results can be copied to the clipboard then pasted into a spreadsheet. Patterns Click the menu item to show a list of available chart patterns to search. The button is grayed until items appear in the watch list. The new name will appear in the Security Watch List. List Click this button to find chart patterns in files and list them. 4. Only . . Enter the new name of the watch list in the "List name" text box 4. directory (folder). Once selected. Be sure to place any updated files in this directory or you'll have to select a new path to them. Click Change. Select the securities you want in the watch list. To change both the name of an existing watch list AND the securities in the watch list: 1. You'll get the hang of it and once set . Also. you won't have to change it. 2. Exit Click this to end the program. Highlight the name in the "Security Watch List" list box. 3. This program doesn't talk to the Internet. Click Get to get the existing list. so you'll have to update the files yourself. The new name will appear in the Security Watch List.2. To change ONLY the name of the watch list: 1. Click Change. Enter the new name of the watch list in the "List name" text box 4. 5. the path will be remembered. Sorry. 3. path names appear using 8 characters so 'documents and settings' folder will show as 'docume~1'.TXT files will appear because that's all this cheap program knows how to read. Click Get to get the existing list. Chart Once a file(s) has been selected for review. Drive. 3. File Format Click the menu item to teach the program to read column-unformatted ASCII files. Get Click on a Security Watch List item then click Get to highlight the securities in the watch list. it cannot be recovered. Delete This button removes a watch list entry. Click Get to get the existing list. Select the securities you want in the watch list. You get what you pay for. Clicking on the button will take you to the chart form where the search for chart patterns begins. and file list boxes Select the drive and directory (folder) where the files you wish to review are located. Click Change. the chart button will enable.

The watch list is meant to move to a folder and highlight securities of interest with the click of a button. say you look at 13 different patterns but each Monday you want to search for only 5 patterns. Watch Lists check box Check or uncheck to show or hide the watch lists. See the Patterns form (below) for more details on how to build a pattern watch l ist (in short. a nd then click Add). the chart pattern and candlestick settings are retrieved. To retrieve a watch list. ================ PATTERNS FORM ================ Select the chart pattern(s) or candlesticks to search for. Sa y you have a portfolio of 10 stocks that you own among a list of 300. The pattern search will use those settings. For more information . highlight the one to remove from the Security Watch List and click Delete. enter a phrase for the watch list. A watch list of those 10 will make it simple to highlight those securities instead of hunting for each one among the 300. To create a watch list. you must be in the directory (folder) where the watch list was created to view it. Only securities highlighted before clicking Add will be included in the watch list. click on the securities you want included in the list (hold the CTRL key down while clicking) and THEN click Add. You can assign a pattern watch list to highlight the 13 patterns and another list to automatically check the 5 patterns for you. Security Watch List A security watch list is an easy way to select the same securities to review. Also. highlight an entry in the Security Watch List and clic k Get. The associated securities will be highlighted. For example. To remove a watch list entry . Watch list names are created on the Patterns form (click on the Patterns menu option). Use pattern list on start up Patternz remembers the chart patterns and candlesticks checked when you exit the program. Otherwise. keeping them few is best. then check the "Use pattern list on start up" box. While there is no limit to the number of watch lists you can have.Pattern Watch List Use the pattern watch list to easily retrieve different combinations of patterns. especially if they contain many securities. any checked patterns will be restored to their prior settings . You do NOT need a watch list to use Patternz. The program will remember the selected securities. With the click of a mouse (using the Get button on the Main Menu). you can switch between the combinations of patterns instead of having to go to the Patterns form and manually check each box. When checked. you check the patterns you want to use. When you click on a watch list item and then click Get (on either the Main Menu or on the Patterns form). give the watch list a name. whatever pattern list was selected the last time will be used when the program starts. If you would like to have the program use the selected pattern watch list.

click Best Performing then check 'And' then Fewest Failures. Finally. trading. You can save additional settings by using the Pattern Watch List. Check boxes Check or uncheck the box to include or exclude the chart pattern or candlestick. The patterns checked are those that fit both categories. Bull Market Choose this radio button to select the top performing patterns in a bull market. Top 10 Continuations Clicking this button will check the top performing patterns that act as continuations of the price trend. then click None to clear the board. For example. according to the state of the . All This checks all of the available patterns on the screen shown. I don't recommend running the program after selecting this because the screen will fill with patterns and it will slow the viewing process. click Get. and then click Add. And Check this box to narrow the pattern selection process to top performers. then the chart patterns are checked. Enjoy! Change To change the SETTINGS of a Pattern Watch List item. described below. Candles or Patterns This button switches the screen from chart patterns to candlesticks and back aga in. and then type in a list name followed by clicking on Add. consult my book. according to the to the state of the bull/bear market and up/down breakout radio buttons.on each chart pattern consult my 'Encyclopedia of Chart Patterns' book for details on identification. 'Encyclopedia of Candlestick Charts.' Any check box selections you make are saved automatically by the program. If candlesticks are displayed. if you want the best performing AND patterns with the fewest failures. To change the watch list name. Add To add a Pattern Watch List name. click Get to retrieve settings and then make your changes to the check boxes. click on the chart patterns and candlesticks that you want associated with that name. Change DOES NOT rename the Pattern Watch List item. click on the name. If all chart patterns (noncandlesticks) are shown. then ALL candlesticks are checked. This will save the settings under a new watch list name. click Change to save those changes. click on a name in the watch list. statistical performance. Bear Market Choose this radio button to select the top performing patterns in a bear market. You can spend countless hours switching from one page to the other. failures. and so on. fill in the text box with the name of the watch list. just the settings. For candlesticks. The name will appear in the list box and the selections will be remembered. Best Performing Clicking this button will check the top performing patterns.

Invert This checks unchecked boxes and unchecks checked boxes but only on the screen shown. Factory Defaults Click this button to restore the selections to the factory defaults. click on a name in the Pattern Watch List and then click Get. That means if candlesticks are shown.bull/bear market and up/down breakout radio buttons. List box The Pattern Watch List names will appear here after adding. where the text box determines how many days to search. NOTE: Price crossing the trendline may not appear on the chart because the logarithmic scale is being used. This does not include small patterns or candlesticks. but does not include candlesticks. Finding and displaying small patterns can slow the program considerably. a gazillion chart patterns will appear on the chart. click on the name in the list box and then click Delete. Top 10 Reversals Clicking this button will check the top performing patterns that act as reversals of the price trend. The trendline option is NOT a method for drawing trendlines. Fewest Failures Clicking this button will check the most reliable patterns according to the state of the bull/bear market and up/down breakout radio buttons. Small This button will check all of the boxes associated with patterns a few days wide. then Patternz will find price crossings within the past week. None This unchecks all boxes on the current screen (either candlesticks or chart patterns). The watch list item will be removed but the check boxes will remain the same. Done Click this button. to save changes and return to the prior form. One of the toolbar options allows you to switch between linear and log scales. according to the state of the bull/bear market and up/down breakout radio buttons. When checked. NOT the chart pattern check boxes. Daily Check this to select chart patterns that appear best on the daily scale. Delete To remove a name from the Pattern Watch List. Down Breakout Choose this radio button to select the top performing patterns with downward breakouts. it will only invert the candle check boxes. If 7 is specified for x. Trendlines Checking up or down trendlines means Patternz will search for price CROSSING the trendline within the past x days. or press ESC. but highlighting . Get To retrieve watch list settings.

Fewest Failures. Auto show phi extensions Check this and the program will automatically select two major and recent turnin g points and then draw phi extensions on the chart. Factory 1 provides dif ferent default settings than Factory 2. Factory 1. the program saves the state of the check boxes and THEN makes the appropriate check box changes. For example. Width is limited to 1-12 months. Common values are 38. the longer Patternz takes to search. or Continuations (BFRC) buttons. Fibonacci Retrace Enter three values for the retrace amount. then enter 6 in the text box. Factory Settings. or if too many . Use 0 to prevent a line from being drawn. Weekly This button selects chart patterns that appear best on the weekly scale. When you click the chart on two price bars (swing low and swing high). Reversals. Up Breakout Choose this radio button to select the top performing patterns with upward breakouts. Undo #0 As you click Best Performing. Clicking the Undo #0 button restores the state of the check boxes to the state just before the BFRC buttons were clicked. see the Phi butto n on the chart form. Factory 2 might also work better for the chart pattern indic ator. Pattern Search Parameters If chart patterns do not appear when you think they should. Maximum Pattern Width The maximum pattern width governs how wide Patternz should search for chart patterns. It does not include small patterns or candlesticks. Hiding the text can speed the redrawing of complicate d screens. the percentages are applied and horizontal lines appear at the selected percentages. Check box Has a check box to show or hide the text (chart or candle pattern info) that app ears near the top of the chart. For an in-depth explanation of phi extensions. then try Factory 2. ================ SETUP FORM ================ This form is meant for advanced users. in percent. and Factory 2 The Factory buttons restore all values to their defaults. but don't be afraid to change parameters if you dislike how Patternz behaves. 50. and 75.price CROSSING a trendline. See "Auto show phi extensions" above for an explanation of the check box. 62. The following appears on the form. Unchecking the box and the ext ensions will disappear. The wider the pattern. if you want to find a double bottom with bottoms separated by a maximum of six months. If you do not see a pattern using Factory 1 def aults. The #0 number changes as you click the BFRC or Undo buttons.

to make them more visible. In the SETUP form. You can change how the program displays SAR by forcing the program to find several peaks and valleys near the same price . Even though peaks on the Dow are not within 50 cents of each other. Show confirmed and unconfirmed text along the top of the chart Checking this box and red text appears along the top of the chart describing the chart or candle pattern directly below. so the line actually represents a band or range of prices. If you know the chart patterns or candlesticks and want a clearer. faster presentation. SAR Button Settings The SAR (support and resistance) button locates peaks and valleys at which price might reverse in the future. . a 50 cent range on a $20 stock will be a much larger range when looking at the Dow. The checkbox was added as a default in version 4. When the various lines combine to form a thicker line. but with lower qualify). the price will be scaled up or down as appropriate fo r the quote data. When searching for SAR. then perhaps Patternz needs a tune-up." when checked. some may be shown as qualifying for support or resistance. will show every peak an d valley. Also.1S . expect more support and resistance. Unchecked means you may see both red (overhead resistanc e) and green (underlying support) lines.000. then uncheck the box. The lines are drawn using the earliest peak or valley within the chosen price range.20 and 50.0003 to the Dow industrials at 10. regardless of the "peaks" or "cents" setting. you will want to adjust the price range associated with the lowest value you saw on the CHART form. Thus. From the CHART form.25) can cause the program to take MINUTES to redraw the screen and are not recommended. Save or Cancel Click Save to save changes or click Cancel to exit the form without saving changes. meaning it may appear too close to another SAR line.patterns appear that are incorrectly drawn. from a futures contract at 1. for example. Click on the text box associated with the correct price range and adjust the value either up (to remove bogus patterns but find fewer ones) or down (to increase the number of patterns found. Enter the minimum number of peaks and valleys to find and how far apart in price those peaks and valleys can be before they are discarded. The check box "Draw lines using one color" allows you to change green support li nes to red. All values must be between 0. Small values (less than 0. This drawing process slows the progr am and clutters the screen. to handle a wide range of prices. remember that the line may be thin but your selected price range may be wide. look at the price scale and remember the lowest price you see. The check box "OR show all peaks/valleys.

Click the Done button to return to the chart form. Click o n a list box entry to view a sample chart of the pattern. . ================ TELL FORM ================ This form explains the typical behavior of the associated chart pattern. Click the Done button to return to the chart form.================ SYMBOLS FORM ================ This form lists symbols and text that appear on the chart form.