Today IBTimesFX could have an interview with Erik Voges, COO and co-founding member of Autochartist.
How did Autochartist.com get started?
We initially started as a company that dabbled in neural networks and other advanced statistical methodologies. At the same time we started trading shares as a hobby. It quickly became clear to us that all the trading educational books we read had a chapter on technical analysis and chart patterns. All the technical indicators were automated, yet there weren't any tools available that automatically identified the chart patterns that the literature explained. So we applied some of the advanced pattern recognition algorithms we were developing to price charts, and found it to be a really useful tool. As we have refined it over the next 8 years we also learned that there were many more people out there who needed some help finding patterns.
Which kind of traders can work with Autochartist.com?
It's really applicable to both sophisticated traders and novices for different reasons. Traders who are just starting out find it a useful tool to help them train their eyes on trade opportunities that develop between support and resistance levels - which are not always easy to spot. At the same time, sophisticated investors who want to maximize their productivity use Autochartist as a scanning tool to find the best opportunities across the markets, and using the quality indicators they can quickly work out where the most suitable picks are for the day.
Also, many people who trade part time and only have a lunch-hour, for example, need to have a quick starting point to decide where the potentially profitable setups are at any time of the day when they are available to place a few trades.
Whether they are swing traders or trend followers, day traders or buy-and-hold investors, Autochartist can be successfully applied across the board, by focusing on particular pattern types or time frames.
Can you explain briefly how it works?
The real power of Autochartist lies in the distributed computational muscle that it brings to traders. To scan thousands of instruments across various exchanges for chart patterns requires an exceptional amount of computing power - far more than is available on even a high-performance personal computer.
So we collect data from all our broker partners and other sources, scan it in a dedicated clustered server facility with an array of customized high-end servers, and redistribute the results to the end users within 3-5 minutes of pattern formation. We scan about 25,000 instruments for chart patterns every 15 minutes on five different time granularities. Really a phenomenal feat if you think about it; we have some great technical people to thank for this.
Can Autochartist.com be implemented on any trading platform?
Yes. For some platforms that have a publicly available API for add-ins or plug-ins, it can be done by our development team (such as the plug-in we built for MetaTrader), while for other platforms it would typically require assistance from the team who developed or maintain the platform codebase.
We have a simple developer API that facilitates this process and enables a development team to do a full integration with Autochartist in less than 3 weeks.
Some of the platforms that have Autochartist integrations include IRESS, CopperDime, VT Trader, PureDeal, thinkDesktop and TradingExpert Pro
Which kind of markets is Autochartist.com scanning?
We can scan all markets - equities, commodities, Forex, CFDs, indices ... basically anything with a price graph. The only requirement is that there is enough liquidity in the instrument allowing for the natural processes of market psychology to shape the chart patterns without abnormal gaps and spikes.
Traders can see on two kinds of patterns on the Autochartist.com Platform: The Completed Patterns and the Emerging Patterns. Can you explain the difference of these two patterns?
A completed pattern is one that fits the text-book definition of a chart pattern that broke through a support or resistance level, creating the expectation that it would typically be followed by a move in price that is somewhat symmetrical to the trend that precedes it. An emerging pattern however, is one that fits all the criteria of the definition except for the breakout. So it serves as an early-warning system for traders that there may be a potential breakout if the price continues to move in the current direction.
Emerging patterns are a useful tool for swing traders who look for ranges within which prices oscillate. An emerging pattern that doesn't continue to break out often touches the support or resistance line, which re-affirms it and forms an emerging pattern in the opposite direction.
Could you explain about PowerStats?
PowerStats was developed in response to the questions often asked by forex traders - When should I trade?, When shouldn't I trade?, Where should I place my stop-loss or take-profit levels?. We took a statistical view once again and mapped the standard deviation of price movements during different hours of the day and days of the week. These views allow the trader to see when an instrument is most volatile and also what the statistical range of probability is for the price over periods of different lengths. This informs the user so set stop-loss and take-profit levels that are attainable and not as unrealistic as being struck by lightning and bitten by a shark at the same time.
We have recently broadened the PowerStats offering by applying it to CFDs and symbols other than forex.
Where do you see Autochartist.com in 5 years?
We see ourselves offering analytical tools applicable to all styles of trading, so our aim is to be on every trader's desktop, and involved in every trading decision traders make. We continually try to simplify the tasks of traders, and to offer them other novel views on the marketplace that aids their understanding of how the markets move. We will bring out a Key Levels tool early next year that identifies key horizontal support and resistance levels. This will ultimately form the link that brings together chart pattern and Fibonacci analysis in a uniform view where patterns under different types of analysis can support one another in confirming significant price levels.
We are also working on expanding our offering to a wider audience of equities and CFD traders and we have a strong focus on building a Trader Community on our web site where educational articles, videos and webinars will be made available to all Autochartist users.