New Research Confirms Candlestick Patterns as Viable Trading Method

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The new site, which offers free information on stock market trading and analysis, found numerous candlestick patterns while studying more than 20 years of historical stock quotes. These patterns accurately predicted a stock’s price advance, although not its decline.

Most trading platforms have an option to show stocks' charts as candlesticks and some can even automatically scan for known patterns

Researchers at, a new informational website about the stock market, recently checked and confirmed nine popular candlestick patterns on more than 400 American stocks. These patterns were able to predict valuable information about a stock’s daily price movements.

Surprisingly, researchers did not find a pattern that warns of a decline in a stock's price; the patterns could forecast only price advances. Some patterns anticipated a price advance during a down trend, thus becoming reversal patterns. According to researchers, it is possible to achieve 2% a month ROI using these patterns, which is much higher than broad market average gains of just 0.6% for the same period.

The researchers checked the last 25 years of historical market quotes and found almost 50,000 instances of different candlestick patterns. The patterns were checked using proprietary software, with strictly defined trigger conditions. For each pattern, the individual stock's price changes in days were averaged out and compared to the average monthly price change of all stocks.’s full research can be downloaded at:

“Most trading platforms have an option to show stocks' charts as candlesticks and some can even automatically scan for known patterns,” said Lukasz Wojtow,'s spokesperson. “But we felt it was not enough and wanted to go a step further: to see how certain candlestick patterns performed in recent years and publish the results available for anyone to see. By disclosing our methods, trigger conditions and results we challenge anyone claiming that candlestick patterns don't work.”

About is a free website with plenty of educational information about the stock market. The majority of the site’s research revolves around technical analysis and popular market indicators.’s mission is to provide traders with accurate, objective tests that enable them to build their own trading systems and incorporate presented results into their trading. For more information, please visit

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Lukasz Wojtow
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