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Does anyone know of a pattern recognition or candlestick formation software for FOREX?

Posted on 2008-06-11
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Last Modified: 2012-05-05
I would like to find a software where it can detect candlestick formations and alert me on them. Does anyone have any experience in this? Ideas?

Examples of the candlestick formations are:
-Morning Star
-Evening Star
-Tweezer
-Engulfing
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Question by:rortiz77
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moorhouselondon earned 500 total points
ID: 21766749
The Holy Grail to some people.  Similar to posting a question: Where can I find buried treasure?

Anyone who is capable of writing such software would have to put a massive disclaimer on their product which would mean that you were accepting a big risk.  Let's suppose that someone has written some software to do this.  If it were good enough, people would buy it, but then, if enough people bought it and acted upon it, you would see a distortion in the "pay-off" section of the candlestick where those who did act upon it took their profits - it would be a victim of its own success.  The writers would have to build some kind of randomising function into the package, or insist that you define certain parameters between limits before you could use it.  One of the problems of using the price "envelope" to analyse the market is that the prices you see are arguably artificial, they are set at a value which might not reflect the truth - it is like looking at estate agent prices in an area and saying that a house in that area is worth that much.  The truth is that deals are being struck which will distort that price.  In both cases the prices are fixed at a level to stimulate the market into "churning".

Having said all this: If you are going to go down this route, your best bet would be to write your own software, or commission someone to do it.  The question then becomes: "Where can I get historical data from to test my program?"
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