Trading is an art that requires you to do the right thing at the right time. Most traders analyze, buy, and sell stocks manually, which is the best thing to do. However, traders could only find and deal in a limited number of stocks while trading manually. However, powerful automated trading systems like Amibroker help traders enter and exit the market at the right time for multiple stocks.
AmiBroker is a simple but powerful software that helps automate trading strategies. It is popular among professional traders who want to trade multiple equities strategically, options, or commodities based on specific trade indicators, rules, and strategies.
This technical analysis software allows users to create their own rules and methods for identifying, buying, and selling stocks for maximum profit.
This article will tell you about the Top 10 AmiBroker AFL for successful Trading along with its pros and cons.
What is AmiBroker?
AmiBroker is a comprehensive technical analysis tool with Automated Algorithmic Trading designed for professional traders to identify and convert stock market opportunities.
The major difference between Amibroker and other trading apps is Amibroker Formula Language (AFL). AmiBroker Formula Language allows users to create their strategy or rules based on trading experiences and preferences to identify the right stocks, determine entry points, stop loss, and exit points. Traders can also use robust metrics and rules compiled by experts and research groups.
What is AFL, and How does it Work?
AFL stands for AmiBroker Formula Language. AFL is a script written in machine language to determine the set of rules and benchmarks while analyzing stocks. Traders can derive useful metrics from existing data and many comprehensive trading rules.
AFL allows traders to determine their analysis using historical data and derivatives. It is pretty simple to write an AFL script, and anyone with basic knowledge of excel formulas could write an AFL code. Also, there are hundreds of preexisting Amibroker AFL scripts written by professional traders proven for successful trading.
Here is how AFL Works?
For example, if you like a particular candlestick to go long, you need to make sure the trade volume is high, the price is within Bollinger bands, and the MACD line favors your trade. How can you identify the stock that tends all these?
Of course, you can do this manually by adding charts and determining buying and selling points yourself, which could be beneficial but takes too long. You must manually do this for every stock you can think of.
With AFL, you can quickly write a few lines for like excel formula as per your requirement and use the same formula across all the stocks you want to analyze to find the right stocks to invest in.
Top 10 AmiBroker AFL for Successful Trading
- Candlestick Pattern AFL
- Auto Support Resistance AFL
- Bollinger Fibonacci Bands AFL
- MACD Buy Sell Signal AFL
- Harmonic Pattern Dynamic Levels AFL
- Supply Demand Zone AFL
- Awesome Oscillator AFL
- RSI Color AFL
- Super Trend Indicator AFL
- Parabolic SAR Buy Sell Signal AFL
Here is the list of the best AmiBroker Formula Language used by traders.
Note: The list doesn’t represent the rank of the AFL. Also, you can sue multiple AFL at once. Therefore, they are not exclusive.
Candlestick Pattern AFL
Although finding a specific candlestick pattern for a single stock is not challenging, finding a recognizable candlestick pattern for several stocks is cumbersome.
Candlestick Pattern Recognizer AFL is coded to quickly identify multiple stocks’ bullish or bearish trends by identifying a recognized candlestick pattern among 35 patterns with just a click.
Pros of Candlestick Pattern AFL
- Extremely useful for identifying trending stocks
- Helps in predicting reversal of a trend
Cons of Candlestick Pattern AFL
- Can’t determine entry, exit, and stop-loss points
- Should be confirmed by other Indicators and signals
Auto Support Resistance AFL
Finding support and resistance is the most challenging task in technical analysis. Many traders fail to determine the correct entry and exit points prices, resulting in a loss.
Auto Support Resistance AFL automatically determines moveable price points as per trends and historical data, which can be used to identify entry/exit points for both longs and shorts with just one click.
Pros of Support Resistance AFL: It helps determine the right entry price, stop loss and exit point based on the history of the stock.
Cons of Support Resistance AFL: Could Determine the entry and exit points, but traders can’t confirm trade on support or resistance price.
Bollinger Fibonacci Bands AFL
In technical analysis, Bollinger bands have become a popular tool for determining a stock’s overbought and oversold opportunities.
Bollinger Fibonacci Bands AFL automatically determines the breakout levels based on stock volatility. It makes it easier for traders to determine whether the price is beyond or below extreme points.
Pros of Bollinger Fibonacci Band AFL: It can be used for longs and shorts to identify an overbought and oversold opportunity.
Cons of Bollinger Fibonacci Band AFL: Since there are no considerations for volume or trading pattern, traders can’t verify a trade with this. It can merely be used to gauge trends.
MACD Buy Sell Signal AFL
MACD line is one of the most used indicators by traders while determining buying and selling points. It generates buying and selling signals based on the intersection of two moving averages, a fast-moving EMA against a differential EMA.
Identifying buying and selling points for various stocks manually takes a lot of time. Auto MACD Buy Signal AFL automatically determines the intersection point and generates a buy signal in just one click.
Pros of Auto MACD Buy Sell Signal
- Identifies correct prices for entry points
- It helps to determine to stop loss for F&O trading
Cons of Auto MACD Buy Sell Signal: Doesn’t consider the trend or strength of a stock.
Harmonic Pattern Dynamic Levels AFL
Swing trading is prevalent among day traders. Based on historical data, many chart analysts also use harmonic patterns to identify buying and selling opportunities or probable stock reversal for multiple stocks.
Recognition of harmonic patterns takes a lot of time, even for professional traders. Harmonic Pattern AFL automatically identifies some of the most popular harmonic patterns like Gartley, Bat, Butterfly Crab, etc.
Pros of Harmonic Pattern: Beneficial to identify highly probable stock reversal points for entry and exit.
Cons of Harmonic Pattern Dynamic Levels: There are too many patterns, and they may give contradicting signals.
Supply Demand Zone AFL
Traders can use demand and supply zones to determine whether the price is low enough to buy a stock or high enough to sell it. Supply Demand Zone AFL automatically generates demand and supply zone based on historical data of a particular stock symbol.
Pros of Supply Demand Zone Charting: Works is a good indicator while identifying supply demand zones.
Cons of Supply Demand Zone Charting
- Based on these zones, traders can’t be sure about the entry or exit points. These are mainly used to identify demand and supply areas that may play a role in future price movements.
Awesome Oscillator AFL
Awesome Oscillator calculates the difference of a 34 day and 5 days-period simple moving average (SMA) and plots it as a histogram. It provides deep insights into the strengths and weaknesses of a stock.
Awesome Oscillator AFL helps traders affirm trends, confirm signal strength and provide possible reversal indications.
Pros of Awesome Oscillator: It can confirm a signal and determine the strength or weakness of any stock or trend.
Cons of Awesome Oscillator: Works only when analyzed with other Technical Analysis signals and indicators.
RSI Color AFL
RSI Color is very similar to the RSI indicator. The only difference here is that the highs and lows are marked with colors so that traders can quickly identify where to enter or exit their trades based on the trend of these lines.
RSI is probably the first indicator most traders use to confirm the strength of the trade. Relative Strength Index AFL helps traders to determine a standard reference period for AFL calculation.
Pros of RSI: Traders can use this AFL to find the loss of momentum for stock and indicate an entry or exit point.
Cons of RSI AFL: Traders can’t confirm a signal or determine long/ short trades.
Super Trend Indicator AFL
Super Trend AFL combines multiple indicators to determine one of the best intraday trading signals. Price action indicator modified moving average, and intraday AFL is merged to give the best trading indication.
Pros of Super Trend Indication:
- Provides real-time stop-loss price
- It gives three different targets
- Provides a pullback strategy for Intraday Trading
Cons of Super Trend Indicator: It isn’t beneficial for long term trade.
Parabolic SAR Buy Sell Signal AFL
This AFL generates a buy or sell signal while keeping the stop loss and targets fixed to assist traders in making better trading decisions. Parabolic SAR AFL helps determine entry and exit points, helps in taking high probability trades and prevents loss during adverse market conditions.
Parabolic SAR buy-sell signal could even be used for FOREX or commodity trading. This AFL helps traders stay within a parabolic curve and determine exit points for all their stocks.
Pros of Parabolic Sar Buy Sell Signal: It provides the stop loss and targets to take high probability trades.
Cons of Parabolic SAR Signal: It doesn’t work effectively in the trending market as it is a trend-following indicator.
How to Use AFL While Trading?
As you can understand from the above list, AFL is a set of rules used to identify trends signals, confirm trends, determine entry, exit, stop loss, and target points.
Although these powerful Amibroker scripts help identify the possible trade, it is likely to provide wrong signals. Here are a few things to remember while using AFL in AmiBroker:
- Use Weekly Indicators such as RSI, ADX, EMA, and MACD while identifying a trend for a buy-sell signal
- Prefer Daily Trend following indicators like Super Trend while making trades in trending markets. This can be combined with RSI for confirmation.
- Use Intraday Technical Analysis such as Awesome Oscillator or Parabolic Sar to confirm trade and take entry/exit points for intraday trades.
- Combine multiple AFL to confirm signals and trends for risk-free Trading.
Many more AmiBroker AFL scripts can be used while trading in the market. The purpose of this article is to provide a list of the best AmiBroker AFL scripts from which most of the traders choose and recommend.
Benefits of Using AFL
There are many benefits of using AFL provided by AmiBroker. Here are some of them.
- Less Human Intervention
Traders can use multiple indicators to confirm a trend or get signals for their trades, thus reducing errors during manual analysis.
- Better Risk/Reward Ratio
Traders can use stop loss and targets to determine the risk-reward ratio before taking a trade which means they have better chances of being profitable.
- Time Saving
Using AFL saves time as traders don’t need to perform complex analysis; instead, click, drag, and drop to analyze the stock and trading signals.
- Multiple Stock Analysis
AFL helps traders run to check and analyze multiple stocks and portfolios quickly. As a result, this increases the chances of finding profitable trading opportunities in the Equity and Options market.
- Synergic Benefits
Combining multiple trading signals, charts and indicators always helps traders to reduce risk and build better.
Limitations of AmiBroker Formula Language
Although AmiBroker AFL is handy for professional traders, a few limitations are associated with AFL that traders need to know.
- Only for Professionals
Amibroker AFL is specifically designed for professional traders dealing in equities, F & O, and commodities. It is not developed to serve the needs of new investors, Angel Investors, Venture Capitalist, Institutional buyers, etc.
- Only for Technical Analysis
Although AFL provides many combinations, it can be used only for finding technical signals. It cannot find any fundamental indicator or filter to take the buy-sell signal.
- Does not work in Long Term Strategy
AFL can be used for position trades where traders take entry and exit points to profit during the price movement, which might last from a few minutes to a few months. However, it does not work for Long Term Investment for growth.
- Technical Constraint
Although many AFL scripts can be found on the internet, installing and using these scripts is still technical for most traders.
Using this AmiBroker AFL list, you can select the script based on your requirements and knowledge of technical analysis to trade in the market. Moreover, using AmiBroker Indicators will also help you improve their Profit/Loss Ratio and reduce risk.
There are hundreds of other AmiBroker AFL scripts available on the internet that traders can use to increase their success rate in the stock market. It is essential for every trader to use these AFL scripts but should remain aware of their limitations before using them in Trading.