THEN Buy on next bar's open Despite its apparent simplicity, this is a non-linear indicator, which outclasses many classical linear indicators. To be honest, it must also said that a sound money management strategy plays an essential role with any kind of indicator. Coming back to our above pattern, one can say that it is a logical condition or a set of logical conditions from which one can derive a trading signal. The signal or indicator is therefore a boolean, i.e. when the market conditions conform the pattern, the signal is on, otherwise off.
Patterns are the essence of trading.
It is unlikely that many traders have ever managed to consistently make money on that one, but the principle is basically the same. There are winning patterns like the one above for instance, if only one could detect them easily. The Genetic Pattern Finder has been designed for that purpose. The G.P.F. will work in all kinds of markets, and will provide you with powerful signals. For that purpose, a 'genetic stochastic K' has been also included.