How many candlestick patterns are there? There is most likely an unlimited number of patterns, where the minority has been labeled or given a name.
Our research indicates there are at least 75 candlestick patterns that have a formal name, see our compiled list below.
Why are candlesticks popular? Why use candlesticks?
Candlesticks are popular, despite the fact that more or less all of them leave room for personal interpretation. On the other hand, that’s perhaps precisely why candlesticks are popular?
It’s impossible to falsify a theory when you can use arguments that are hard to quantify. When there is no definite answer, you can always use anecdotal evidence to argue your case.
However, the most obvious reason why candlesticks are used is their visual appearance:
As soon as you get used to it, which might take some time, you get a much better and clearer look at the price action. We have been using candlesticks for decades, even though we don’t directly trade any signals based on these formations.
Why don’t we use candlesticks in our strategies?
First, some candlestick formations are hard to quantify. Second, we indirectly use some of the formations in the strategies. For example, the popular IBS indicator is quite similar to the Doji.
Third, we are in the process of writing code to more or less all the formations that we can manage to quantify. We will publish the result sometime during 2021.
However, in a preliminary test we did some months ago we got some surprisingly positive results in the 23 formations we tested:
The complete list of candlestick patterns
We have managed to compile some 75 candlestick patterns. If you are interested in their interpretation please go to this link:
Perhaps even more interesting is to find out their performance. To our knowledge there are zero backtests on candlesticks, until we did it. We quantified (with strict rules) all candlestick patterns we could find, and we defined 75 different patterns. We have the rules in Amibroker and plain English (plain English for Python trading and backtesting). We backtested all patterns on S&P 500. You can read more or order here:
How many candlestick patterns are there? We managed to find 75 different candlestick patterns that are not duplicate (see the full list below). We have quantified and backtested the following 75 candlestick patterns:
|Bearish Abandoned Baby|
|Bearish Belt Hold|
|Bearish Harami Cross|
|Bearish In Neck Line|
|Bearish Mat Hold|
|Bearish Meeting Lines|
|Bearish On Neck Line|
|Bearish Separating Lines|
|Bearish Side By Side|
|Bearish Stick Sandwich|
|Bearish Three Line Strike|
|Bearish TriStar Doji|
|Bullish Abandoned Baby|
|Bullish Belt Hold|
|Bullish Harami Cross|
|Bullish Homing Pigeon|
|Bullish In Neck Line|
|Bullish Mat Hold|
|Bullish Meeting Lines|
|Bullish On Neck Line|
|Bullish Piercing Line|
|Bullish Separating Lines|
|Bullish Side By Side|
|Bullish Stick Sandwich|
|Bullish Three Line Strike|
|Bullish TriStar Doji|
|Concealing Baby Swallow|
|Dark Cloud Cover|
|Downside Tasuki Gap|
|Falling Three Methods|
|Four Price Doji|
|Long Legged Doji|
|One Black Crow|
|One White Soldier|
|Rising Three Methods|
|Three Black Crows|
|Three Inside Down|
|Three Inside Up|
|Three Outside Down|
|Three Outside Up|
|Three Stars In The South|
|Three White Soldiers|
|Upside Gap Two Crows|
|Upside Tasuki Gap|
How many candlestick patterns are there? The 75 candlestick patterns above are not the complete list – there are probably many more we are unaware of.
– Why are candlesticks popular, and what makes them visually appealing?
Candlesticks are popular due to their visual appearance, providing a clear look at price action. While they leave room for personal interpretation, their popularity may stem from the subjective nature of their analysis.
– Why don’t you use candlesticks in your trading strategies?
Some candlestick formations are challenging to quantify, and we indirectly use similar formations in our strategies. We are currently in the process of writing code for various candlestick formations and plan to publish the results in 2021.
– Do candlesticks work, and can they be considered reliable indicators?
We have managed to compile 75 different candlestick patterns and have quantified and backtested their performance, particularly on the S&P 500. You can find the rules in Amibroker and plain English for Python trading and backtesting on our website.