Learn: what the scanners look for

A candle shows four prices for a period: open, high, low and close. The body is the gap between open and close; the thin lines (shadows or wicks) reach the high and low. Green means the close was above the open, red means below. Each card below shows a shape the scanner can find, drawn with made-up example candles. The highlighted candles are the ones that form the pattern.

Read this first: a pattern describes what already happened. Textbooks associate some shapes with a pause or change in direction, but they fail often and prove nothing about the next candle. Candle Trade never tells you to buy or sell.

Candlestick patterns

The other scanners

Breakouts

Lists instruments whose latest candle closed above the highest high, or below the lowest low, of the previous 20 candles. It describes a move beyond a recent range. Moves beyond a range often reverse.

Volume shockers

Compares the newest candle's volume with the average of the previous 20. "3.2x" means three times the usual volume. High volume says many shares changed hands; it does not say who was right.

Open interest buildup

Open interest (OI) is the number of futures or options contracts still open. Comparing price change with OI change gives four standard labels:

  • Long buildup: price up, OI up
  • Short buildup: price down, OI up
  • Long unwinding: price down, OI down
  • Short covering: price up, OI down

Option chain pulse

Shows open interest at each strike price. The put-call ratio divides total put OI by total call OI. Strikes with the most OI show where contracts are concentrated, not where the price must go.

Index movers and sector heat

An index is a weighted basket. Index movers shows how many index points each stock is adding or removing. Sector heat shows the average day change of each sector's stocks.

Risk calculator

Divides the amount you are willing to lose by the loss per unit at the stop level you choose. It is arithmetic using your own numbers. Brokerage, taxes and slippage are not included.

Using scanners responsibly