Success of Japanese Candlestick Patterns?

[trismes]

Not unless he comes with more. From what he's already posted, I think he's full of crap!

mate of mine interviewed someone for a job the other day. Guy walks in, no word of a lie, put his feet up on the desk and said 'tell me why I should work for you'. And sucked his teeth for good measure.

 

[easymon1]

mate of mine interviewed someone for a job the other day. Guy walks in, no word of a lie, put his feet up on the desk and said 'tell me why I should work for you'. And sucked his teeth for good measure.

This I gotta hear more about, lol.
What position was he inquiring about?
How did he hear about it?

 

[MarkBrown]

anything placed on a time based chart will never be too dependable as the time element is detrimental.

 

[wrbtrader]

I am very intrigued by Japanese candlestick patterns. I read a study from back in 1998 which conducted tests on the predictive power and profitability of candlestick patterns on all S&P 500 stocks from 1992 to 1996, and buy-side returns after adjusting for transaction costs were huge at between 0.56 and 0.76 percent on a 100k trade (trades entered near close and sold in 1/3rds for the following 3 days fyi) resulting in an annually compounded return of between 202 to 259%.

In particular 2 patterns were found to predict future price action correctly 75 percent of the time, the patterns were the three white soldiers and three inside up patterns.

For those of you with experience trading with these patterns as part of your strategy, are they as predictive and profitable as this study suggests?

Japanese Candlesticks is one of the easiest price action patterns to backtest on your own on whatever it is that you're trading without you being dependent upon the opinions of others.

Get to work and start backtesting.

wrbtrader

 

[trismes]

This I gotta hear more about, lol.
What position was he inquiring about?
How did he hear about it?

I’d like to say it was a quant job at Jane Street but alas no— junior sales role, fmcg.
I think the govt told him to go to interviews else they’d stop his benefits so he was doing his level best to not get a job. In that sense the guy was a high achiever— he got booted out in 2 minutes.

 

[lariati]

Candlesticks just don't make sense with electronic markets. The open and close are nearly arbitrary compared to the past when those would have been hugely informative data points.

Using datasets of the S&P from 1992 to 1998 is pointless. That is even before decimalization.

 

[trismes]

Candlesticks just don't make sense with electronic markets. The open and close are nearly arbitrary compared to the past when those would have been hugely informative data points.

Using datasets of the S&P from 1992 to 1998 is pointless. That is even before decimalization.

Nothing at the core has changed; Big bang (the 80s not the actual big bang), HFT, tighter spreads have all made difference around the edges but the structure remains the same, and all of us sync to the same clock. Unless you're in India, Sri Lanka or parts of Oz, it's still 48 minutes past the hour right now.