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Alpha Models

81+ Candlestick Patterns Explained, Backtested & Ranked 2023

March 25, 2023November 11, 2022 by Leo Smigel
Japanese Candlestick Patterns

I analyzed over seven hundred million Japanese candlestick pattern trades in the crypto, forex, and stock market spanning multiple decades to determine what works and doesn’t. Isn’t data science cool? If you’re a trader struggling to make money with candlestick …

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Bearish Belt Hold Explained & Backtested (2023)

March 30, 2023November 11, 2022 by Leo Smigel
Bearish Belt Hold Candlestick Pattern Illustration © Analyzing Alpha

The bearish belt hold is a one-bar bearish reversal Japanese candlestick pattern that suggests near-term bullish volatility according to an extensive backtest. Traditional traders might be surprised to learn that they’re likely losing money using typical candlestick charting methods. But …

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Bearish Breakaway Explained & Backtested (2023)

March 30, 2023November 11, 2022 by Leo Smigel
Bearish Breakaway Candlestick Pattern © Analyzing Alpha

The bearish breakaway is an extremely rare five-bar Japanese candlestick pattern that supposedly suggests a future bearish reversal. The pattern occurs too infrequently to determine the best trading strategies with any statistical significance. But if you’re interested in this pattern, …

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Bearish Closing Marubozu Explained & Backtested (2023)

March 30, 2023November 11, 2022 by Leo Smigel
Bearish Closing Marubozu Candlestick Pattern Illustration © Analyzing Alpha

The bearish closing marubozu, also known as the black closing marubozu, is a frequently occurring one-bar Japanese candlestick pattern that’s thought to be bearish. But what if I told you this pattern is not a bearish signal as traditionally traded, …

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Categories Candlestick Patterns 2 Comments

Bearish Counterattack Explained & Backtested (2023)

March 30, 2023November 11, 2022 by Leo Smigel
Bearish Counterattack Candlestick Pattern Illustration © Analyzing Alpha

The bearish counterattack, also knowns as the bearish counterattack lines, is a Japanese candlestick pattern that suggests future volatility according to the data. Crypto traders should avoid this pattern due to a lack of statistically significant trading strategies. Traders using …

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Bearish Doji Star Explained & Backtested (2023)

March 30, 2023November 11, 2022 by Leo Smigel
Bearish Doji Star Candlestick Pattern Illustration © Analyzing Alpha

The bearish doji star is a two-bar bearish reversal Japanese candlestick pattern that historically leads to near-term volatility. Traders using traditional technical analysis methods to go bear lose money across all markets tested. Not so hot, right? But what if …

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Bearish Engulfing Explained & Backtested (2023)

March 30, 2023November 11, 2022 by Leo Smigel
Bearish Engulfing Candlestick Pattern Illustration ©Analyzing Alpha

The bearish engulfing is a one-bar bearish reversal Japanese candlestick pattern that backtests show suggests volatility. History shows traditional bearish engulfing methods have a negative edge in all markets tested. Who likes losing money in every market? I don’t! But …

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Three Black Crows Explained & Backtested (2023)

March 30, 2023November 11, 2022 by Leo Smigel
Three Black Crows Candlestick Pattern Illustration © Analyzing Alpha

The three black crows is a rare four-bar bearish reversal Japanese candlestick pattern that is best traded using a bearish mean reversion strategy in the stock market, according to backtests spanning multiple decades. Crypto and forex traders should avoid this …

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Categories Candlestick Patterns

Bearish Harami Explained & Backtested (2023)

March 30, 2023November 11, 2022 by Leo Smigel
Bearish Harami Candlestick Pattern Illustration © Analyzing Alpha

The bearish harami is a two-bar bearish reversal Japanese candlestick pattern that suggests volatility is near according to an extensive backtest. If you practice traditional candlestick technical analysis, there’s a good chance you’re losing money with this three-bar pattern. But …

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Bearish Harami Cross Explained & Backtested (2023)

March 30, 2023November 11, 2022 by Leo Smigel
Bearish Harami Cross Candlestick Pattern Illustration © Analyzing Alpha

The bearish harami cross is a two-bar bearish reversal Japanese candlestick pattern that suggests bullish volatility in the stock and crypto markets and a bearish bounce in the forex markets, according to the data. The pattern loses money in every …

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