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AFT stands for Anchor Column Follow Through Pattern.
TradePoint and RZone have 4 bearish AFT patterns.
All these patterns belong to the same AFT family. These options allow you possibilities of using variations of these patterns based on your preference.
Below is an explanation for the Bearish AFT – Anchor breakout.
The bearish anchor column represents strong bearish momentum in the stock.
After the bearish anchor column, the bearish breakout helps identify bearish trade opportunities.
The bearish breakout in this pattern occurs when the price goes below the low price of the bearish anchor column in the pattern.
The bearish breakout pattern that took place within 9 columns in the bearish AFT Anchor breakout pattern is effective (8 columns after Anchor column). It is possible for the Bearish Anchor column to appear in any column during the last 9 columns. The price should not break the anchor column high or low before triggering a breakout.
Bearish breakout pattern in the 4th column after bearish anchor column is a 4-column AFT Anchor breakout pattern. Breakout in the 6th column after bearish anchor column is a 6-column AFT Anchor breakout pattern. And the breakout in the 8th column is an 8-column AFT Anchor breakout pattern.
A bearish AFT Anchor breakout pattern considers all these scenarios and marks the pattern accordingly.
When you scan for a Bearish AFT Anchor breakout pattern, you get a list of stocks that qualify for the pattern in the 4th, 6th, or 8th column after the Anchor column.
This pattern shows the stocks have consolidated within the bearish anchor column. It shows weakness of the bulls. The bearish breakout of the Anchor column shows strength of the bears and offers bearish trade opportunity.
If you also want to scan for a follow-through pattern immediately after the anchor column, use the Immediate Bearish AFT pattern in conjunction with Bearish AFT pattern.
This pattern can be plotted on the chart by adding it from the Add study menu in TradePoint & Patterns in RZone. The pattern is also available in the System Builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.