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How to measure the efficiency of a candlestick pattern?

It’s not enough just to know that a pattern has occurred on the candlestick chart, but also how “well” or “badly” it had performed in the past. In other words, how effective is the signal being generated?

And here, even before going into a heavy duty backtesting analysis, we can check some simple statistics first. As...

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Bearish Breakaway

See our Patterns Dictionary for other patterns.

Check our CandleScanner software and start trading candlestick patterns!

Japanese name: kotsubame tsutsumi
Forecast: bearish reversal
Trend prior to the pattern: uptrend
Opposite pattern: Bullish Breakaway
Number of candle lines: 5

Construction:

  • First candle
    • a tall white candle
  • Second candle
    • a white candle
    • candle opens above the previous closing price...
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Bearish Three-Line Strike

See our Patterns Dictionary for other patterns.

Check our CandleScanner software and start trading candlestick patterns!

Japanese name: santeuchi
Forecast: bearish continuation
Trend prior to the pattern: downtrend
Opposite pattern: Bullish Three-Line Strike
Number of candle lines: 4

Construction:

  • First candle
    • a candle in a downtrend
    • black body
  • Second candle
    • black body
    • the opening price is within the...
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