Autochartist Analysis Expiry Criteria
Under the following conditions, a trading opportunity will become expired:
- If
a pattern is more than 5 candles old (3 candles for Consecutive Candles
and Big Movement patterns), or if an "emerging" pattern has satisfied
the criteria to be classified as a completed pattern
- For Chart Patterns:
We add the distances between the resistance and support line at the
start and end of the pattern and half it. We then calculate a
relevance-gradient, by using the pattern-length along with the value,
and create a triangle based on the X0 of the support or resistance line
(for emerging patterns) or the pattern-end-price (for completed
patterns). We expire the pattern if a subsequent candle-close crosses
the relevance-gradient.
- For Completed Fibonacci Patterns:
If the pattern is bearish and the candles have started trending
upwards, or if the pattern is bullish and the candles have started
trending downwards.
- For Key Level Patterns: We
use a percentage of the distances between the candle with the second
highest high in the pattern and the candle with the second lowest low in
the pattern. We then calculate a relevance-gradient, by using the
pattern-length along with the value, and create a triangle based on the
close of the last candle in the pattern. If a subsequent candle-close
crosses the relevance-gradient, we flag the pattern as expired.
