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This pattern condition can help you define the retracement of column of ‘O’ to its previous column of ‘X’.
N is a retracement percentage in the current column of ‘O’ below the previous column. You cand define the retracement percentage. For instance, if you select 50% retracement and run the scanner on the stock, you will see candidates that have retraced less than 50% from their previous swing in the columns below. It helps you to identify shallow retracement candidates.
A small retracement compared to its previous swing indicates bullishness. Defining it in terms of percentage rather than absolute helps us scan stocks. In previous columns, we would not know the number of boxes for various stocks, it could be 10, 20, 50, 100 or anything else. Defining retracement in terms of percentage would help here.
With the help of a system builder, you can also design various patterns and strategies.
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.