Are candlestick technical trading strategies profitable in the Japanese equity market?

We show that candlestick charting, the oldest known form of technical analysis, is not profitable in the Japanese equity market over the 1975–2004 period

Ben R. Marshall


Key concepts

Scholarcy highlights

  • Fock et al find that candlestick technical analysis is not profitable on intraday German futures data; their study is less relevant to this paper for several reasons
  • Technical analysis books highlight that the significance of the close price to candlestick charting is due to it being the final price prior to the market being closed for a period
  • This suggests that candlestick technical analysis may not be as reliable on an intraday basis
  • Results for the other null models are available on request
  • 7. We initially intended to consider the profitability of candlestick technical analysis with varying levels of transaction costs but decided against this once it became evident that it is not profitable before transaction costs

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