Everything You Wanted to Know About Candlestick Charts Is an Unregulated Product Published by Thames Publishing Ltd
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A Statistical Analysis of the Predictive Power of Japanese Candlesticks Mohamed Jamaloodeen Georgia Gwinnett College, [email protected]
Journal of International & Interdisciplinary Business Research Volume 5 Article 5 June 2018 A Statistical Analysis of the Predictive Power of Japanese Candlesticks Mohamed Jamaloodeen Georgia Gwinnett College, [email protected] Adrian Heinz Georgia Gwinnett College, [email protected] Lissa Pollacia Georgia Gwinnett College, [email protected] Follow this and additional works at: https://scholars.fhsu.edu/jiibr Part of the Finance and Financial Management Commons Recommended Citation Jamaloodeen, Mohamed; Heinz, Adrian; and Pollacia, Lissa (2018) "A Statistical Analysis of the Predictive Power of Japanese Candlesticks," Journal of International & Interdisciplinary Business Research: Vol. 5 , Article 5. Available at: https://scholars.fhsu.edu/jiibr/vol5/iss1/5 This Article is brought to you for free and open access by FHSU Scholars Repository. It has been accepted for inclusion in Journal of International & Interdisciplinary Business Research by an authorized editor of FHSU Scholars Repository. Jamaloodeen et al.: Analysis of Predictive Power of Japanese Candlesticks A STATISTICAL ANALYSIS OF THE PREDICTIVE POWER OF JAPANESE CANDLESTICKS Mohamed Jamaloodeen, Georgia Gwinnett College Adrian Heinz, Georgia Gwinnett College Lissa Pollacia, Georgia Gwinnett College Japanese Candlesticks is a technique for plotting past price action of a specific underlying such as a stock, index or commodity using open, high, low and close prices. These candlesticks create patterns believed to forecast future price movement. Although the candles’ popularity has increased rapidly over the last decade, there is still little statistical evidence about their effectiveness over a large number of occurrences. In this work, we analyze the predictive power of the Shooting Star and Hammer patterns using over six decades of historical data of the S&P 500 index. -
Copyrighted Material
Index 12b-1 fee, 68–69 combining with Western analysis, 3M, 157 122–123 continuation day, 116 ABC of Stock Speculation, 157 doji, 115 accrual accounting, 18 dragonfl y doji, 116–117 accumulated depreciation, 46–47 engulfi ng pattern, 120, 121 accumulation phase, 158 gravestone doji, 116, 117, 118 accumulation/distribution line, hammer, 119 146–147 hanging man, 119 Adaptive Market Hypothesis, 155 harami, 119, 120 Altria, 29, 127, 185–186 indicators 120 Amazon.com, 151 long, 116, 117, 118 amortization, 47, 49 long-legged doji, 118 annual report, 44–46 lower shadow, 115 ascending triangle, 137–138, 140 marubozu, 116 at the money, 192 real body, 114–115 AT&T, 185–186 segments illustrated, 114 shadows, 114 back-end sales load, 67–68 short,116, 117 balance sheet, 46–50 spinning top, 118–119 balanced mutual funds, 70–71 squeeze alert, 121, 122, 123 basket of stocks, 63 tails, 114 blue chip companies, 34 three black crows, 122, 123 Boeing, 134–135 three white soldiers, 122, 123 book value, 169 trend-based, 117–118 breadth, 82–83, 97 upper shadow, 115 breakaway gap, 144 wicks, 114 break-even rate, 16–17 capital assets, 48, 49 breakout, 83–84, 105–106 capitalization-based funds, 71 Buffett, Warren, 152 capitalization-weighted average, 157 bull and bear markets,COPYRIGHTED 81, 174–175 Caterpillar, MATERIAL 52–54, 55, 57, 58, 59, 131 Bureau of Labor Statistics (BLS), 15 CBOE Volatility Index (VIX), 170, 171 Buy-and-hold strategy, 32, 204–205 Chaikin Money Flow (CMF), 146 buy to open/sell to open, 96 channel, 131–132 charting calendar spreads, 200–201 -
Stock Market Prediction Using Candlestick Chart
International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056 Volume: 07 Issue: 01 | Jan 2020 www.irjet.net p-ISSN: 2395-0072 Stock Market Prediction using Candlestick Chart Razik Batliwala1, Muddassir Khan2, Durvesh Bhushan3 1,2Information Technology, PadmabhushanVasantdada Patil Pratishthan’s College of Engineering, Sion Mumbai 3Vaity Information Technology PadmabhushanVasantdada Patil Pratishthan’s College of Engineering, Sion Mumbai ------------------------------------------------------------------------***------------------------------------------------------------------------- Abstract—The stock market is a place where shares of publicly listed companies are traded. There shares based on brought and sold on this basis of there stock. The price of stocks and assets are an important part of the economy. There are many factors that affect share prices. However there is no specific cause for the prices to rise or fall. This makes investment subject to various risks. We proposed a novel method for prediction of stocks price on the basis of statistical data and making of candlestick chart for up to 3-4 days to find if investment are beneficial or loss of money, It is also beneficial to analyzing in future stock. In this paper we developing (LCS) Longest Common Subsequence Algorithm to retrieve numerical sequences that partially match. It also use for real time service provider to provide stock market sentiments. Keywords—Stock price prediction; Technical analysis; Candlestick charts; Longest common subsequence algorithm for numbers; Multi numerical attributes; Nse,Bse stock average. 1. INTRODUCTION Stock market prediction techniques play a crucial role to bring more people into market and encourage markets as a whole. Fundamental analysis and technical analysis are two popular approaches to successful stock trading. -
Candlestick—The Main Mistake of Economy Research in High Frequency Markets
International Journal of Financial Studies Article Candlestick—The Main Mistake of Economy Research in High Frequency Markets Michał Dominik Stasiak Department of Investment and Real Estate, Poznan University of Economics and Business, al. Niepodleglosci 10, 61-875 Poznan, Poland; [email protected] Received: 4 August 2020; Accepted: 1 October 2020; Published: 10 October 2020 Abstract: One of the key problems of researching the high-frequency financial markets is the proper data format. Application of the candlestick representation (or its derivatives such as daily prices, etc.), which is vastly used in economic research, can lead to faulty research results. Yet, this fact is consistently ignored in most economic studies. The following article gives examples of possible consequences of using candlestick representation in modelling and statistical analysis of the financial markets. Emphasis should be placed on the problem of research results being detached from the investing practice, which makes most of the results inapplicable from the investor’s point of view. The article also presents the concept of a binary-temporal representation, which is an alternative to the candlestick representation. Using binary-temporal representation allows for more precise and credible research and for the results to be applied in investment practice. Keywords: high frequency econometric; technical analysis; investment decision support; candlestick representation; binary-temporal representation JEL Classification: C01; C53; C90 1. Introduction While researching any subject literature, often one can notice that some popular methods in scientific research are copied and used without second thought by further researchers. Nowadays, the vast majority of papers pertaining to the analysis of course trajectory on financial markets and connected prediction possibilities use historical data in the form of a candlestick representation (or its derivatives such as daily opening prices, usually called daily prices, etc.) (Burgess 2010; Kirkpatrick and Dahlquist 2010; Schlossberg 2012). -
Japanese Candlestick Patterns
Presents Japanese Candlestick Patterns www.ForexMasterMethod.com www.ForexMasterMethod.com RISK DISCLOSURE STATEMENT / DISCLAIMER AGREEMENT Trading any financial market involves risk. This course and all and any of its contents are neither a solicitation nor an offer to Buy/Sell any financial market. The contents of this course are for general information and educational purposes only (contents shall also mean the website http://www.forexmastermethod.com or any website the content is hosted on, and any email correspondence or newsletters or postings related to such website). Every effort has been made to accurately represent this product and its potential. There is no guarantee that you will earn any money using the techniques, ideas and software in these materials. Examples in these materials are not to be interpreted as a promise or guarantee of earnings. Earning potential is entirely dependent on the person using our product, ideas and techniques. We do not purport this to be a “get rich scheme.” Although every attempt has been made to assure accuracy, we do not give any express or implied warranty as to its accuracy. We do not accept any liability for error or omission. Examples are provided for illustrative purposes only and should not be construed as investment advice or strategy. No representation is being made that any account or trader will or is likely to achieve profits or losses similar to those discussed in this report. Past performance is not indicative of future results. By purchasing the content, subscribing to our mailing list or using the website or contents of the website or materials provided herewith, you will be deemed to have accepted these terms and conditions in full as appear also on our site, as do our full earnings disclaimer and privacy policy and CFTC disclaimer and rule 4.41 to be read herewith. -
Three Advancing White Soldiers
Continuation Patterns 143 DAILY BAR 1990 CQG INC. -- . 2021 -H= 2021 . ... 1991 -L= 2002 . .A= -20 . 2150 ... 7/23/90 . Hammer . 2021 .L= -C= 2002 . 3 EXHIBIT 7.35. Dow Jones Utilities-1990, Daily (Falling Three Methods). wrong. Wait until the pattern is formed, or confirmed, before acting on its implications! Exhibit 7.35 is a classic falling three method whose bearish implica- tion was negated by the hammer. If the hammer was not enough to tell one the was ending more proof was added with the white ses- sion following the hammer. This completed a bullish engulfing pattern. THREE ADVANCING WHITE SOLDIERS Like much of the candlestick terminology, this pattern has a military association. It is known as the three advancing white soldiers (see Exhibit 7.36) or, more commonly, three white soldiers. It is a group of three white candlesticks with consecutively higher closes. If this pattern appears at a low price area after a period of stable prices, then it is a sign of strength ahead. The three white soldiers are a gradual and steady rise with each white line opening within or near the prior session's white real body. Each of the white candlesticks should close at, or near, its highs. It is a 144 The Basics EXHIBIT 7.36. Three Advancing EXHIBIT 7.37. Advance Block EXHIBIT 7.38. Stalled Pattern White Soldiers healthy method for the market to rise (although if the white candlesticks are very extended, one should be cautious about an overbought market). If the second and third, or just the third candlestick, show signs of weakening it is an advance block pattern (see Exhibit 7.37). -
Development and Analysis of a Trading Algorithm Using Candlestick Patterns
COMP 4971C – Independent Study (Summer 2016) DEVELOPMENT AND ANALYSIS OF A TRADING ALGORITHM USING CANDLESTICK PATTERNS By MUTHUKUMAR, Sivaraam Year 4, Dual Degree in Technology and Management (MEGBA) [email protected] 11th August 2016 Supervised by: Dr David Rossiter Department of Computer Science and Engineering Development and Analysis of a Trading Algorithm using Candlestick Patterns Table of Contents ABSTRACT .................................................................................................................................. 3 INTRODUCTION ......................................................................................................................... 3 Assumptions .......................................................................................................................... 3 PROCESS FLOW .......................................................................................................................... 4 GETTING DATA ........................................................................................................................... 5 Assumptions .......................................................................................................................... 5 COLOUR CODING THE CANDLESTICK CHART ............................................................................. 5 Assumptions .......................................................................................................................... 6 Colour coding algorithm ....................................................................................................... -
Trading Guide
Tim Trush & Julie Lavrin Introducing MAGIC FOREX CANDLESTICKS Trading Guide Your guide to financial freedom. © Tim Trush, Julie Lavrin, T&J Profit Club, 2017, All rights reserved https://tinyurl.com/forexmp Table Of Contents Chapter I: Introduction to candlesticks I.1. Understanding the candlestick chart 3 Most traders focus purely on technical indicators and they don't realize how valuable the original candlesticks are. I.2. Candlestick patterns really work! 4 When a candlestick reversal pattern appears, you should exit position before it's too late! Chapter II: High profit candlestick patterns II.1. Bullish reversal patterns 6 This category of candlestick patterns signals a potential trend reversal from bearish to bullish. II.2. Bullish continuation patterns 8 Bullish continuation patterns signal that the established trend will continue. II.3. Bearish reversal patterns 9 This category of candlestick patterns signals a potential trend reversal from bullish to bearish. II.4. Bearish continuation patterns 11 This category of candlestick patterns signals a potential trend reversal from bullish to bearish. Chapter III: How to find out the market trend? 12 The Heiken Ashi indicator is a popular tool that helps to identify the trend. The disadvantage of this approach is that it does not include consolidation. Chapter IV: Simple scalping strategy IV.1. Wow, Lucky Spike! 14 Everyone can learn it, use it, make money with it. There are traders who make a living trading just this pattern. IV.2. Take a profit now! 15 When to enter, where to place Stop Loss and when to exit. IV.3. Examples 15 The next examples show you not only trend reversal signals, but the Lucky Spike concept helps you to identify when the correction is over and the main trend is going to recover. -
Candlesticks, Fibonacci, and Chart Pattern Trading Tools
ffirs.qxd 6/17/03 8:17 AM Page iii CANDLESTICKS, FIBONACCI, AND CHART PATTERN TRADING TOOLS A SYNERGISTIC STRATEGY TO ENHANCE PROFITS AND REDUCE RISK ROBERT FISCHER JENS FISCHER JOHN WILEY & SONS, INC. ffirs.qxd 6/17/03 8:17 AM Page iii ffirs.qxd 6/17/03 8:17 AM Page i CANDLESTICKS, FIBONACCI, AND CHART PATTERN TRADING TOOLS ffirs.qxd 6/17/03 8:17 AM Page ii Founded in 1870, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and market- ing print and electronic products and services for our customers’ professional and personal knowledge and understanding. The Wiley Trading series features books by traders who have survived the market’s ever-changing temperament and have prospered—some by re- investing systems, others by getting back to basics. Whether a novice trader, professional, or somewhere in-between, these books will provide the advice and strategies needed to prosper today and well into the future. For a list of available titles, visit our web site at www.WileyFinance.com. ffirs.qxd 6/17/03 8:17 AM Page iii CANDLESTICKS, FIBONACCI, AND CHART PATTERN TRADING TOOLS A SYNERGISTIC STRATEGY TO ENHANCE PROFITS AND REDUCE RISK ROBERT FISCHER JENS FISCHER JOHN WILEY & SONS, INC. ffirs.qxd 6/17/03 8:17 AM Page iv Copyright © 2003 by Robert Fischer, Dr. Jens Fischer. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. PHI-spirals, PHI-ellipse, PHI-channel, and www.fibotrader.com are registered trademarks and protected by U.S. -
Candlestick Patterns
INTRODUCTION TO CANDLESTICK PATTERNS Learning to Read Basic Candlestick Patterns www.thinkmarkets.com CANDLESTICKS TECHNICAL ANALYSIS Contents Risk Warning ..................................................................................................................................... 2 What are Candlesticks? ...................................................................................................................... 3 Why do Candlesticks Work? ............................................................................................................. 5 What are Candlesticks? ...................................................................................................................... 6 Doji .................................................................................................................................................... 6 Hammer.............................................................................................................................................. 7 Hanging Man ..................................................................................................................................... 8 Shooting Star ...................................................................................................................................... 8 Checkmate.......................................................................................................................................... 9 Evening Star .................................................................................................................................... -
© 2012, Bigtrends
1 © 2012, BigTrends Congratulations! You are now enhancing your quest to become a successful trader. The tools and tips you will find in this technical analysis primer will be useful to the novice and the pro alike. While there is a wealth of information about trading available, BigTrends.com has put together this concise, yet powerful, compilation of the most meaningful analytical tools. You’ll learn to create and interpret the same data that we use every day to make trading recommendations! This course is designed to be read in sequence, as each section builds upon knowledge you gained in the previous section. It’s also compact, with plenty of real life examples rather than a lot of theory. While some of these tools will be more useful than others, your goal is to find the ones that work best for you. Foreword Technical analysis. Those words have come to have much more meaning during the bear market of the early 2000’s. As investors have come to realize that strong fundamental data does not always equate to a strong stock performance, the role of alternative methods of investment selection has grown. Technical analysis is one of those methods. Once only a curiosity to most, technical analysis is now becoming the preferred method for many. But technical analysis tools are like fireworks – dangerous if used improperly. That’s why this book is such a valuable tool to those who read it and properly grasp the concepts. The following pages are an introduction to many of our favorite analytical tools, and we hope that you will learn the ‘why’ as well as the ‘what’ behind each of the indicators. -
Identifying Chart Patterns with Technical Analysis
746652745 A Fidelity Investments Webinar Series Identifying chart patterns with technical analysis BROKERAGE: TECHNICAL ANALYSIS BROKERAGE: TECHNICAL ANALYSIS Important Information Any screenshots, charts, or company trading symbols mentioned are provided for illustrative purposes only and should not be considered an offer to sell, a solicitation of an offer to buy, or a recommendation for the security. Investing involves risk, including risk of loss. Past performance is no guarantee of future results Stop loss orders do not guarantee the execution price you will receive and have additional risks that may be compounded in pe riods of market volatility. Stop loss orders could be triggered by price swings and could result in an execution well below your trigg er price. Trailing stop orders may have increased risks due to their reliance on trigger pricing, which may be compounded in periods of market volatility, as well as market data and other internal and external system factors. Trailing stop orders are held on a separat e, internal order file, place on a "not held" basis and only monitored between 9:30 AM and 4:00 PM Eastern. Technical analysis focuses on market action – specifically, volume and price. Technical analysis is only one approach to analyzing stocks. When considering which stocks to buy or sell, you should use the approach that you're most comfortable with. As with all your investments, you must make your own determination as to whether an investment in any particular security or securities is right for you based on your investment objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results.