Candlestick Chart Patterns?
I do use candlesticks, though not as an entry/exit signal Detection system, not even as a Verification system, but for Interpretation of the Detected and Verified signal. Verification is more difficult than Detection. Interpretation is more difficult than Verification. If anything can interpret a signal, the Candlestick can. It can interpret whether the Detected and Verified signal is a Reversal (start of a new trend) signal or a Continuation of the previous trend signal. The main Reversals are FakeOut (Key) Reversal – Morning Stars/Evening Stars/Piercing Lines/Cloud Covers, Naked Close Reversal – Engulfing Lines and Smash Day Reversal – Harami/Hammer/Hanging-man. The main Continuation signal is the Outside Range Day – Black Crows/White Soldiers. Inside Days are moments of indecision – Doji Stars. I have nothing against candlesticks. If they help you, use them. But they make for a very poor signal detection indicator. Just look what has happened to the Japanese traders who use candlest
