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Best Candlesticks Pattern to Trade Stocks

Author

Listed:
  • Gil Cohen

    (Department of Business, Western Galilee Academic College, Acre, Israel.)

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.

Suggested Citation

  • Gil Cohen, 2020. "Best Candlesticks Pattern to Trade Stocks," International Journal of Economics and Financial Issues, Econjournals, vol. 10(2), pages 256-261.
    • Handle: RePEc:eco:journ1:2020-02-29
    as

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    References listed on IDEAS

    as
    1. G. Caginalp & H. Laurent, 1998. "The predictive power of price patterns," Applied Mathematical Finance, Taylor & Francis Journals, vol. 5(3-4), pages 181-205.
    2. Ben Marshall & Martin Young & Rochester Cahan, 2008. "Are candlestick technical trading strategies profitable in the Japanese equity market?," Review of Quantitative Finance and Accounting, Springer, vol. 31(2), pages 191-207, August.
    3. Horton, Marshall J., 2009. "Stars, crows, and doji: The use of candlesticks in stock selection," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(2), pages 283-294, May.
    4. Marshall, Ben R. & Young, Martin R. & Rose, Lawrence C., 2006. "Candlestick technical trading strategies: Can they create value for investors?," Journal of Banking & Finance, Elsevier, vol. 30(8), pages 2303-2323, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Candlesticks Patterns; Trends; Algorithmic Trading; Stocks Investing.;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

    Statistics

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