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Exactly what do I think about running a free stock screener pattern finder? It's moronic. Keep away!
Ok, I'll clarify.
I recommend stock screeners a whole lot. I am a huge fan of them. They scan a large number of stocks in seconds. They are able to do what a human is able to do in an 8 hour work day in five seconds. But you should find out where to draw the line with stock screeners.
Employing a stock screener with specifications like the price of a stock, the volume traded per day, and even a candlestick pattern is great. Where I draw the line is attempting to employ a stock screener to do the very subjective interpretation of stock patterns.
All pattern recognition on a stock chart needs to be left to a human. This is because computers lack good judgment. They're wonderful at doing huge amounts of objective computational work. They're awful at doing subjective analysis that will require sound judgment.
Using a stock screener to provide you with buy signals on patterns is stuffed with hazards.
For instance, a bullish channel breakout can be a awful buy if the stock has a history of forming erratic v tops. Especially if the v top forms on an individual stock while the entire S&P 500 is in a downtrend. Or imagine if unemployment numbers are coming out in a day that could possibly be bad? Or let's say the larger pattern on a weekly chart shows a bearish engulfing candlestick or a MACD going negative? Or what about the market entering into the two weakest months of the year, September and October? Or a hundred other things a computer that lacks wisdom can not contemplate.
Technical analysis is as much an art as it is calculating numbers. Once you learn all the technical analysis patterns over many years of trading,
