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AFT stands for Anchor Column Follow Through Pattern.
TradePoint and RZone have 4 bullish AFT patterns.
> Bullish AFT – Anchor breakout
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 Bullish AFT – Anchor breakout.
The bullish anchor column represents strong bullish momentum in the stock.
After the anchor column, the price breakout helps identify bullish trade opportunities when momentum is strong.
The breakout in this pattern occurs when the price goes above the high of the bullish anchor column.
The breakout that took place within 9 columns in the AFT Anchor breakout pattern is effective (8 columns after Anchor column). It is possible for the Bullish 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 the anchor breakout.
Breakout in the 4th column after bullish anchor column is a 4-column AFT pattern. Breakout in the 6th column after bullish anchor column is a 6-column AFT pattern. And the breakout in the 8th column is an 8-column AFT pattern.
A bullish AFT Anchor breakout pattern considers all these scenarios and marks the pattern accordingly.
When you scan for a Bullish 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.
This pattern shows the stocks have corrected or consolidated within the bullish anchor column. It shows strength of the bulls. The breakout of the Anchor column shows strength of the bulls and offers bullish trade opportunity.
If you also want to scan for a follow-through pattern immediately after the anchor column, use the Immediate Bullish AFT pattern in conjunction with Bullish AFT Anchor breakout pattern.
This pattern can be plotted on the chart by adding it from the study menu in TradePoint & 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.