Strategy Detail

Candlestick Patterns

Enter on a named candlestick pattern, hold for a fixed bar count, no stops. Covers the classical patterns most traders learn first, from Hammer to Three Black Crows.

What It Does

Candlestick Patterns runs on a single contract at a single timeframe. On every bar close it inspects the trailing window of bars and asks one question: do these bars form the chosen candlestick pattern?

If the pattern is recognized and the strategy is flat, it enters at the close in the pattern’s direction. Bullish patterns trigger long entries, bearish patterns trigger short entries.

Once in a position, the only exit is a fixed bar-count hold: after hold_bars bars have elapsed since entry, the strategy flattens unconditionally. No stops, no profit targets, no trend filters, no scaling. The pattern selection is the strategy.

Which Patterns Are Available

See the catalog below for the patterns covered. The lineup starts with the classical formations most traders learn first, the ones covered in every Japanese candlestick text, from the Hammer through Three Black Crows. Each pattern links to its full definition in the pattern catalog, alongside its sample backtests where available.

Timeframe Matters

Candlestick patterns are traditionally read on daily bars, and that is where the presets default. The form lets you pick any timeframe from 15 minutes up to daily. Faster timeframes fire more signals but also more noise. The pattern definitions are shape-based, not timeframe-aware, so the same shape is recognized whether you read 5-minute or daily bars.

Best In

  • Liquid markets where each daily bar carries enough conviction that shape-based patterns are not pure noise. Equity index futures and large-cap commodities are the usual candidates.
  • Studies that want to test classic chart-folklore claims on equal terms. Run several patterns across the same contract and date range, and the comparison is direct.
  • Comparing the same pattern across instruments. Sample runs are available for NQ, ES, and GC at identical defaults, so the same pattern can be read side by side across markets.

Where It Struggles

  • Strong trends. A reversal pattern inside a roaring trend often gets run over within the hold window.
  • Low-signal regimes. Some patterns are strict and may not fire for months at a stretch on a quiet instrument.
  • The bar-count exit is blunt. A signal that briefly works and then reverses against the position will still be held for the full hold period.

Possible Uses

  • A control strategy for any candlestick-based idea that adds filters. If a fancier setup tracks the bare pattern entry, the filters are not earning their keep.
  • An honest survey of the chart-folklore claims. Run several patterns across instruments and years and see which patterns hold up.
  • A starting point for layered work. Combine the pattern trigger with a trend filter, a volatility regime, or a time-of-year window and see whether the conditional edge tightens.

What It Does Not Do

  • No stops, no targets, no trailing exit. The bar-count hold is the only exit.
  • No partial fills, no scaling, no pyramiding. One signal, one position, one contract count.
  • No regime awareness. The pattern fires the same whether the market is trending hard, ranging tight, or churning.
  • No awareness of the prior trade’s outcome. A losing streak does not change the next entry size or hold length.

FAQ

Do candlestick patterns work?

Candlestick patterns are described in every Japanese candlestick text but rarely tested on equal terms. This family enters on a named pattern in its direction, holds for a fixed bar count with no stops or targets, and reports the real backtested outcome with commissions and slippage. Browse the catalog above and run a pattern on NQ, ES, or GC to see what the data shows instead of relying on the classical story.

Which candlestick patterns are most reliable?

There is no single answer, which is the point of testing them side by side. The patterns share the same entry and exit logic and differ only in shape, so running several across the same contract and date range gives a direct comparison. Use the catalog and the sample backtests to see which patterns held up and which got run over, rather than trusting the folklore success rates.

When do candlestick patterns struggle?

Reversal patterns struggle most inside strong trends, where the signal often gets run over within the fixed hold window. The bar-count exit is blunt, so a pattern that briefly works and then reverses is still held for the full period. Some strict patterns also fire rarely, sometimes not for months on a quiet instrument, which makes their results noisier.

Test this strategy

Run it on your contracts, timeframes, and parameters.

Pattern catalog (80)

Each pattern shows its shape and a short definition, then its sample backtests run at identical defaults. The shape and description link to the full pattern page.

Bullish reversal

Bearish reversal