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.…
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Long Black Candle
See our Patterns Dictionary for other patterns. Check our CandleScanner software and start trading candlestick patterns! [caption id="attachment_4595" align="alignright" width="126"] Figure 1. Long Black Candle (basic candle).[/caption] Forecast: reversal or continuation of the trend Trend prior to the pattern: n/a Opposite candlestick: Long White Candle See also: Black Candle Construction: black body upper and lower…
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The problem with doji candles (Part 2)
In the first part of the article, we described what a doji basic candle is and how to find it on the candlestick chart. We focused there on how the definition of a doji candle can be modified/adjusted to gain some flexibility. As a quick reminder, according to the classic definition, a doji candle is…
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Backtesting Part 2
In this blog article we look we look at how easy it is to set-up the conditions in CandleScanner in order to perform a backtest. First we need to customize the settings for the backtest, defining the entry and exit conditions. For the sake of illustration we assume the default entry and exit settings (found…
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