More on Candles

My recent forays into candlestick patterns has not been very encouraging. I tested the doji as a trend reversal signal and the results were not impressive.

On doing some more research, I came across candlestickgenius.com. They claim to be fairly successful at spotting candlestick pattern and have a description on the most reliable candlestick patterns. In the next few posts, I will be testing three of these patterns and presenting the results.

Bullish Engulfing

Bullish engulfing pattern is formed when

• today's candle is taller than previous day's
• today's candle body is taller than previous day's
• today's candle is white and the previous day's is black

Hammer
A hammer is formed when:

• today's candle is white
• today's candle body is short in relation to the candle height
• today's candle body is located near the top of the candle

Bullish Harami Pattern
A bullish harami is formed when:

• today's candle is white 
• previous day's candle is dark
• today's candle is shorter than previous