Pattern Search Software - about me
[Pattern Search Software ]

ABOUT ME

 

My name is Alexander Nikitin. I am a professional trader and a programmer as well. You can always find me as one of the TOP traders according to TradingView rating:

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I've started trading in 2008 using advanced pattern formations and harmonic patterns strategies. At that time I didn't see the difference between the two so I thought I was trading harmonic patterns.

Like many of you in the beginning I failed. I completely blew off two accounts. Not because I didn't proper educate myself. I knew all the ratios by heart. Not because I didn't do a backtesting of harmonic patterns. I did a very profound reseach work finding thousand of examples. The strategy showed a positive expectancy on history but I couldn't repeat the results real time trading. I knew that the strategy is only a minor part of success and psychology is its major part. I started looking for whatever information about trading psycholgy. I studied lots materials. And I found the reason - I was deviating from the rules. So, I wrote a trading plan and read it every day to exclude deviations. My trading became systematic but this didn't help me either.

"If my trading psychology and trading discipline were ok then maybe my backtesting psychology and backtesting discipline weren't ok?" - I thought. I had some reasons to think so. I knew that human perception was highly affected by one's beliefs. If somebody starts backtesting he believes that the strategy has a positive expectancy. If somebody believes that the strategy has negative expectancy he will hardly waste his time testing it. Look at the mechanism attentively. Our believes demand expression and confirmation. If somebody attacks our beliefs we will argue back. Nobody wants to be wrong that's why we will inevitably find some facts proving that we are right. This is called to look for confirmation of believes. So, when backtesting one is looking for confirmations of his beliefs, he mainly pays attention to winners rather than to losers. Especially while backtesting large historical data. That's why backtesting results are usually much better than trading results. "How can one make backtesting objective"? - I thought. I only saw one way out: to use automatic forex systems for backtesting. Robots don't have beliefs, they have nothing to confirm. 

This was a turning point. I started studying MQL4 documentation to create a software that will make harmonic patterns identification easier. In three months a PatternSearch1.0 metatrader 4 script was ready. This was a prototype of ManualPS metatrader 4 script. The only difference was that ManualPS drawas advanced formations not harmonic patterns. I was to mark market movements with trend lines and the script drew a pattern with entries, stops and targets on my chart within a blink of an eye. This metatrader 4 script made my backtesting much faster. Earlier I had to spend 2 weeks to backtest my standard 60 000 bars (i.e.10-year period 1H timeframe or 2,5-year period 15M timeframe) sample size. The script empowered me to finish the same work within 2 days. And the next thing that amazed me was a number of setups found. Compare this: manually I could only find 400 setups but using my script I could find 800 setups. Wow, twice more. I couldn't believe my eyes. No wonder my backtesting wasn't objective.  At that period I worked mostly on building up a winning portfolio. I  have tested more than 20 pairs and found that some of them were extreme losers. Patterns just didn't work on these pairs. This was a discovery to me.

My trading results were about breakeven and I was thinking of some filter to make patterns more accurate. This was my second turning point. I attended lots of webinars, read piles of books... I came to a conclusion that the majority of professional traders were using higher timeframe analysis. The idea seemed appealing to me. I had to identify support/resistance on Daily and then switch to my trading timeframe in search for patterns that coincide with higher timeframe analysis. I knew that finding support/resistance is as subjective as drawing patterns. That's why I decided to code an metatrader 4 indicator first. In a week I had a FractalZZ metatrader 4 indicator ready. 

This made my account to grow slowly and some of my friends started begging me for my software. I gave some copies for free but none of my friends succeeded. I knew what were the reasons. First, they didn't know the approach as fully as I did. Second, they didn't do backtesting that's why they had no confidence in what they were doing. And third, ManualPS has an element of subjectivity: one needs to draw the swings himself. It is good for seasoned traders who know very well how to identify market swings but it is catastrophic for newbies. That's why I decided to create fully Automatic Pattern Search metatrader 4 script. I had absolutely no problems coding it but I had to decide which size of the swings should be used for pattern identification. I was experimenting with different settings and found three optimal sets: large swings, medium swings and small swings. I did split the script into three scripts on purpose. The reason was simple: if a trader doesn't know how to identify swings he will hardly understand how to set proper setting in the swing identification algorythm of my script. LargeSwingPS, MediumSwingPS and SmallSwingPS only draw the last pattern (the one that is setting up) that's why they are good for trading. I was happy to use ManulPS and didn't use Automatic Pattern Search for my trading. But when I released these metatrader 4 scripts the number of my cusomers increased radically.

But I didn't stop and my dream finally came true. I realized an algorythm of fully automatic backtesting. This was my third turning point. When PatternSearchPro  metatrader 4 script was done it turned everything upside down. I remember the first time I launched it: I was really shocked. It found and drew 1300+ completed patterns within 2 seconds. Same standard 60 000 bars period. I couldn't belive that there were so many hidden patterns! Finally I got fully objective backtesting results. I was really excited. The speed of backtesting empowered me to test multiple timeframes on multiple pairs. I could check whatever idea came into my mind: what if I use extended targets - you are welcome; what if I use 1 atr stops instead of 2 atr stops?- you are welcome; what if I only trade large cyphers on this particular timframe? - you are welcome; what if I only use a second impulse of a trend for XA? - you are welcome and so on. So many ideas. I did so many discoveries using PatternSearchPro!! My equity curve became much smoother, the drawdowns became less. 

Right now I continue my research work. It is mostly connected withh optimizing the type of a pattern and its size depending on timeframe and pair. I will give you an example of the most popular pair - eurusd. In order not to overload you with excessive amount of information I will only give you an accuracy of patterns to hit the first target:

1) 2,5-year period on 15M timeframe (60 000 bars): 1113 setups

 pattern type/swing size  large swings  medium swings  small swings
 gartley 55,56% 37,31% 41,67%
bat 34,88% 46,27% 42,86%
butterfly 49,04% 47,18% 44,55%
cypher 53,45% 41,46% 39,81%

 

2) 10-year period on 1H timeframe (60 000 bars): 1343 setups

 pattern type/swing size  large swings  medium swings  small swings
 gartley 32,20% 33,80% 31,78%
bat 48,78% 63,79% 52,83%
butterfly 50,38% 46,29% 42,31%
cypher 58,06% 52,57% 44,65%

 

3) 17-year period 4H timeframe (25 480 bars): 609 setups

 pattern type/swing size  large swings  medium swings  small swings
 gartley 52,94% 55,56% 48,21%
bat 52,94% 54,17% 48,98%
butterfly 50,00% 50,60% 53,96%
cypher 71,43% 54,05% 52,70%

It is not a secret that on average risk to reward ratio in advanced pattern formations is about 1:1. This means that trading patterns with less than 50% accuracy you will lose money. Add 1% on spreads, 1% on commissions and 1% on swaps and you will get a number of 53% to stay breakeven. The information above by itself can turn your trading from negative to positive. You just need to use only those patterns that have more than 53% accuracy. Can you imagine what secrets will be revealed to you if you exploit PatternSearchPro?

If you are ready to make one step further in your trading career then click Pattern Search Software for details.

Best regards, Alexander Nikitin.