A slight change is made to the scanner to reduce the number of trades as well as increase higher profitable stocks. The performance of May was not bad really. No red day was found. The major contributor was 2312.HK which had been up about 4 times in stock price. The net profit balance was the highest among the first five months of the year.
A completely new candlestick-based scanning algorithm has been developed and is undergoing backtests. It focuses on bullish and bearish candlestick patterns with assistance from the T-Line, decycler, and a bit of Stochastic indicator. Each pattern is a signal for long or short. However, it is not used alone. A sequence of patterns is identified with confirmation on a recent top or a recent bottom to catch the major turning points. It is used for mid-term trend trading. That’s why the T-Line, decycler and Stochastic are used altogether.