Probability of Candle Sticks

[Viggy 10]

Hello everyone,

 

I have seen a lot of places state how certain candle stick formations such as a Marubozu or a hammer have a probability of being a reversal and even sites like thepatternsite.com has probabilities of each type of candle and its likelihood of a reversal or a big move, but I can not find any information on the internet about how to work out these probabilities myself.

 

I was thinking of doing it in matlab but I was wondering if that was the best way to do it, is there any other ways that would be better or faster?

 

If someone out there has all the data that I could see, that would be really interesting.

 

I look forward to hearing your replies,

 

Best regards,

 

Vig

[vipulbhadra 10]

Hello everyone,

 

I have seen a lot of places state how certain candle stick formations such as a Marubozu or a hammer have a probability of being a reversal and even sites like thepatternsite.com has probabilities of each type of candle and its likelihood of a reversal or a big move, but I can not find any information on the internet about how to work out these probabilities myself.

 

I was thinking of doing it in matlab but I was wondering if that was the best way to do it, is there any other ways that would be better or faster?

 

If someone out there has all the data that I could see, that would be really interesting.

 

I look forward to hearing your replies,

 

Best regards,

 

Vig

Hey Mate,

 

Good point .

 

There is no right or wrong answer to using this patterns (both Candle or Chart) as your "Signal". Most of the time people club this with different variations (like clubbing this with Volume, Volatility, etc) to prepare a trade setup which defines your Trade and Entry signal. You need to see what suits you and works for you, so as to give you a edge in your trading.

 

I personally use one of this pattern (pair of Doji's) as my reversal Signal. I club it along with Wide Range bar, to get my setup. You will need to find for yourself what best suits your style (For Example, i was equally profitable when using a earlier - simple range breakout strategy). So, spend some screen time with this, back test and see, if this patterns give you any edge in your trade setup.

 

Regards.

[Obsidian 10]

Hello everyone,

 

I have seen a lot of places state how certain candle stick formations such as a Marubozu or a hammer have a probability of being a reversal and even sites like thepatternsite.com has probabilities of each type of candle and its likelihood of a reversal or a big move, but I can not find any information on the internet about how to work out these probabilities myself.

 

I was thinking of doing it in matlab but I was wondering if that was the best way to do it, is there any other ways that would be better or faster?

 

If someone out there has all the data that I could see, that would be really interesting.

 

I look forward to hearing your replies,

 

Best regards,

 

Vig

 

Did you make any progress?