Fire-Up the Scan Libraryįrom Your Dashboard, under Member Tools, scroll down to Sample Scan Library. Let's consider a scan that looks for engulfing patterns in a downtrend. In other words, it works best in a downtrend or a bear market, according to historical performance stats (based on Bulkowski's studies). A more thorough examination reveals that this pattern does better when the price goes down. After all, it has a 63% reversal rate, which means the price goes above the pattern's top about 63% of the time.īut there's a catch: The results after a breakout can be a bit of a letdown depending on the context. So, the bullish engulfing candlestick seems pretty good at first. Quick note here (based on Thomas Bulkowski's candlestick analysis in his book Encyclopedia of Candlestick Charts ).

Here's one example: the bullish engulfing candlestick formation. If this matches your style, then technical analysis-based scans might be your thing. You may want to trade stocks you're familiar with, or you may prefer trading 'patterns' that you're familiar with.

But there are thousands of stocks, and sticking to familiar territory can sometimes limit your opportunities. The reason for this is that many traders often stick with a familiar list or category of stocks, and for obvious reasons: to avoid trading a stock that you know very little about or to check the fundamental basis for each trade. There are times when technical merit alone can justify the case for a trade.

Setup aka mfa