Testing Merrill Five-Point Patterns Across Prices and Indicators
Summary
This article describes a tool for testing Arthur Merrill’s five-point price patterns, grouped into M and W formations. It proposes searching for the patterns in price series based on open, close, high, or low values, as well as in selected oscillators. For each detected formation, the tool examines subsequent price movement and estimates directional probabilities and a speed-related ratio against a user-set profit threshold. Users can select patterns, timeframes, symbols, sample dates, indicators, and weighting coefficients through a graphical interface.
The article explains the evaluation workflow and application settings, but the supplied text does not include the full algorithm description or empirical results showing that the formations predict profitable moves. Its measure depends on the selected threshold, time window, data, indicator, and weighting parameters. The author cautions that analysis can take a long time when many patterns and timeframes are selected, and that historical data must be available. The material presents a way to investigate pattern performance, not evidence that Merrill patterns are effective.
Key ideas
- Merrill patterns comprise M and W groups, each built from five price points.
- The proposed tool searches patterns in price series and selected oscillators across symbols and timeframes.
- It evaluates subsequent direction and the relative speed of reaching a configured threshold.
- Results depend on sample dates, data availability, selected indicators, and weighting coefficients.
- The article describes a testing framework but supplies no conclusive performance evidence for the patterns.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.