Caginalp, G.; Laurent, H. - In: Applied Mathematical Finance 5 (1998) 3-4, pp. 181-205
, we perform a satistical test of the predictive capability of candlestick patterns. Out-of-sample tests indicate …% during a two-day holding period. An essentially non-parametric test utilizes standard definitions of three-day candlestick … patterns and removes conditions on magnitudes. The results provide evidence that traders are influenced by price behaviour. To …