خلاصة:
The Foreign Exchange Market is where one currency is exchanged for another.In the
18th century, the Japanese developed an approach to technical analysis that traced and
predicted the prices of rice contracts.There are some ways to classification of
candlesticks. From one perspective they can be divided into two types of ‘Reversal
Patterns’, and ‘Continuation Patterns’.In this paper nine different reversal candlestick
patters are analyzed. They include hammer, hanging man, doji gravestone, doji
dragonfly, doji long-lagged, bearish and bullish engulfing, piercing pattern, and dark
cloud cover.
It is analyzed whether various candlestick patterns can predict candles and trends in
Foreign Exchange Market. The first group of minor hypotheses include whether or not a
candle with an inverted color proceed by these patterns. The second group analyze
whether or not the profit of trading after various patterns is significantly profitable.
I considered the first, second, and the third candles as different possible points for
finishing the trades. These three different points have different results, hence I’ve
categorized them in three various scenarios and discussed about them separately.
One of the most important sign of power of a specific pattern is when the first next
candle be a confirmation of trend changing. In this part only the confirmed cases are
analyzed in two different scenarios.
At the end on the basis of minor hypotheses, it is concluded that there is not any
evidence that we can say “various candlestick patterns predict candles and trends in
Foreign Exchange Market effectively”. Although the success rates of correct prediction
of the next candle after a confirmed pattern is almost insignificant in all cases, but the
profit of trading after this confirmation can be significant. We can conclude that a
confirmed pattern could be profitable in all mentioned patterns