Technical analysis is, and remains to this day, a popular method of analysing the foreign exchange market. Technicians attempt to plot market sentiment and psychology via chart studies, employing concepts such as support and resistance levels, trend research, Fibonacci patterns, and technical indicators.
Given the broad range of currency pairs available in the Forex market, analysing multiple instruments can become demanding.
Fortunately, Autochartist is in place to lend a helping hand, a technical analysis tool that delivers a customisable pattern-recognition engine on a number of key timeframes.
According to Autochartist, since its inception in 2004, the company has partnered with many leading Stock, Forex, Futures, and CFD brokerage firms across the globe, servicing millions of traders in over 100 countries.
With FP Markets, Autochartist is simple to install and free to use on both live and demo accounts via MetaTrader 4 (MT4) and MetaTrader 5 (MT5) trading platforms. It should be noted, however, using Autochartist on a demo account (a practice account that trades with simulated funds) incurs a delay of 5 candles, while live trading accounts operate in real-time.
Chart Pattern Recognition – MT4 Plugin
Traders often demonstrate habitual behaviour in the financial markets and, observed in large numbers, form identifiable chart patterns.
The classic head and shoulder’s top and bottom formations, for example, are accepted reversal trading signals. Other chart patterns Autochartist highlights are channels, wedges, triangles, Harmonic (think Gartley and Butterfly patterns) and Fibonacci studies, key levels, and double tops/bottoms (see figure 1.A).
Autochartist scans financial instruments within ‘Market Watch’, seeking actionable trading opportunities. This essentially aids the technical analyst, providing the freedom to potentially look at other currency pairs. The more trading instruments logged in Market Watch, the more chart patterns the trader will see.
Employing Autochartist can obviously save hours of chart time, a key benefit of using the software. What’s also great is it is not only limited to the Forex market. The pattern-recognition tool scans global markets, such as Futures, CFDs, Cryptocurrencies (bitcoin), and Equities.
On top of displaying tradable patterns on charts (see figure 1.B), clicking the Autochartist web application (see figure 1.C) and copying/pasting the link into your browser gains access to Autochartist’s web component (see figure 1.D). This, although delayed on a demo account, allows traders the freedom to explore a number of additional key metrics, including Trading Opportunities, Volatility Analysis, Performance Statistics, Messaging and Alerts, and Trading Community.
The Autochartist Risk Calculator delivers an easy-to-use risk-management system (see figure 1.E), applied by dragging and dropping the EA on to the chart of interest.
- Traders can display Expected Ranges over the next 24 hours. This is key to help calculate risk parameters and fix logical stop-loss positions.
- Once a risk value is set, you can enter the value in the risk window (in this example a cash amount of 100 GBP).
- To configure market orders, simply left-click the orange line displayed on the chart (the colour can be modified) which represents the pre-determined protective stop-loss level. Adjust this line to your desired stop-loss location and the software will automatically calculate the necessary trade volume (position size – seen at the bottom of the risk calculator [green]) you need to take in order to risk the amount of money specified at the desired stop-loss level. Simple, fast, and effective, this is a perfect addition for any trading style.
- To configure limit orders, checking the Custom Entry Price box pencils in an additional green level on the chart, representing the limit entry level. This is positioned along with the orange line, as underlined above, as the protective stop-loss order. Modifying these two levels will automatically calculate the volume required to trade at the desired levels.
Autochartist’s daily market reports (see figure 1.F) are a big plus for serious traders.
Reports are generated three times a day ahead of the Tokyo, London, and New York sessions (this can be altered by clicking on the small settings tab). Each page provides a snapshot of the technical outlook before the opening of major financial centres.
The report also highlights upcoming high impact economic indicators to be aware of, as well as chart patterns on the radar. As a side note, email reports are delayed by 24 hours for demo accounts, though live accounts receive real-time data.
Autochartist MT4 – Going Forward
Autochartist is clearly a company that understands the needs of traders.
The market-leading software has a place in every trader’s toolbox, catering to all experience levels. Beginners, in particular, benefit from the software, helping to recognise patterns (such as Fibonacci retracements), and correctly calculate position size.
While the software can highlight potential trades, Autochartist’s MT4 plugin does not trade on behalf of the trader, despite functioning as an Expert Advisor (EA). Therefore, trading decisions are ultimately down to the individual trader.
To start trading can be a daunting process. Therefore, opening a demo account with FP Markets and loading the Autochartist plugin could be an idea to get your feet wet, allowing you to test drive the MT4 platform and also Autochartist’s features.
DISCLAIMER: The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation, or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com, and should be considered before deciding to deal with those products. Derivatives can be high risk; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.
Important Note: Autochartist™ is a respected third-party supplier of FP Markets. Traders should note that FP Markets offers the software to its customers as a bonus feature and does not warrant the completeness, accuracy, or timeliness of the information supplied. FP Markets does not have any connection with, or vouch for the accuracy of the trading styles (or trade opportunities, trading strategies, trade setups, or trading tools) described, or predict or guarantee any outcome as a result of their use.
Responsibility for the claims made in the materials is made by Autochartist™ and Autochartist™ alone. All predictions are not in any way provided by FP Markets. Autochartist™, its affiliates, and any third-party contributor will not be liable for any claim, damages, or other liability arising from, out of, or in connection with the use of the Charts. The Charts run on pricing data provided to a third-party charting administrator, and you accept that the price data displayed in the Charts may be delayed and that Autochartist™ does not guarantee the accuracy or completeness of the data.
The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The strategies mentioned herein may not be suitable for all investors. The opinions and recommendations herein are by Autochartist™ and do not take into account individual client’s circumstances, objectives or needs, and are not intended as recommendations of particular securities, financial instruments, or strategies to particular clients. Users of this service should take independent decisions regarding any securities or financial instruments mentioned herein.