BEST CANDLESTICKS PATTERN TO TRADE STOCKS

Gil Cohen

doi:10.32479/ijefi.9298

Abstract

This research examines whether candlesticks patterns can predict trends swings. Our results indicate that well known two days "Engulfing" pattern have failed to produce a positive gain while the "Harami" pattern has barely succeeded to do so. A more complex patterns known as the "Kicker" barley achieved a positive average gain and was also outperform by the simple B&H strategy. We found that the "Stairs" pattern developed here, has achieved a positive gain for all twenty examined stock and has outperformed the B&H strategy for sixteen out of the twenty stocks.Keywords: Candlesticks Patterns, Trends, Algorithmic Trading, Stocks Investing.JEL Classifications: C1, M2DOI: https://doi.org/10.32479/ijefi.9298

Highlights

One of the most important clues that most traders want is when a market is ending one trend and starting another so they can get on the new trend early
The results of our algorithmic trading results are presented as follows: (1) Net profit (NP) is the NP for all trades generated by the trading system
This does not mean the NP of all trades is positive and vice versa a

Summary

Introduction

One of the most important clues that most traders want is when a market is ending one trend and starting another so they can get on the new trend early. They found that most of the 3-day candlestick reversal patterns tested, appear to generate large profits.

Results

Conclusion