Do Candlestick Patterns Work? We Tested 800,000 of Them
Every trading book has a chapter on candlestick patterns. A Hammer after a selloff means the bulls are stepping in. A Bearish Engulfing at the top of a run means the party is over. The pictures are convincing, and the stories behind them make sense. But do they actually predict anything? Our daily candlestick scanner has been detecting these patterns every evening, so we stored three years of prices and every pattern the scanner found, then checked what each stock did next. ...