Firstly how can I screen for chart patterns such as triangles, flags, cup and handles etc? I haven't actively traded these patterns before simply because I don't spot them. How many stocks do I need to examine each day?(I spend about 2 hours a day chart reading).

Many thanks for your help,

Phil

~~~Christopher's Response~~~

Phil,

The best approach in the long run is to scan through the major indexes. Start with the S&P 500 and the Nasdaq 100. Scan thru them looking for stocks with the patterns that you want to trade. Personally, I scan thru every stock that trades at least 800,000 shares that is trading above $5 a share. I scan thru these every sunday - thursday evening. During the day I will scan thru the major indexes looking for intraday patterns.

Examine as many as you can. Two hours a night is great, the more the better. The most important thing to do is to find one or two patterns (start with one) that you can become expert at spotting and eventually expert at trading. Some traders start out trying to spot and trade too many patterns and often end up not very good at exploiting any of them. Take them one at a time and get to know them as well as you can. Start with a pattern that grabs and holds your attention. Begin to scan for it every day and watch how it behaves and reacts in certain situations. If you find one pattern that seems to suit you very well and it is profitable, why go looking for more? Of course you may want to begin to get to know a few more for the future, but my point is that it is better to master one or a few patterns than to be adequate with many.

If you want good low cost charting programs, some with "end of day" scanning capabilities try these: day trading software.

If you want to scan using real-time data during the trading day, then you can either manually scan the major indexes and sectors (my preference) or use a software program with that capability.

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