James Llewelyn. The Honest Guide To Candlestick Patterns

Llewelyn James, 2014. — 183 p.Whether it be a candlestick pattern that actually has no edge, or a market filter which can used to improve your risk adjusted returns, Llewelyn's books include systematic trading strategy ideas and the corresponding performance data which can help the reader to formulate their own strategies.Why I wrote this book
How this book is structured
Candlestick Chart Basics
What is a candlestick chart?
Reading individual candlesticks
Candlestick Patterns
Bullish Candlestick Patterns
The bullish engulfing pattern
The morning star pattern
The piercing pattern
The hammer pattern
The bullish kicker pattern
The bullish harami pattern
The inverted hammer pattern
Bearish Candlestick Patterns
The bearish engulfing pattern
The evening star pattern
The dark cloud cover pattern
The hanging man
The bearish kicker pattern
The bearish harami pattern
The shooting star pattern
Technical Indicators
Introduction to Technical Indicators
Technical indicators are not predictive
The technical indictor filters which are used during the tests.
Moving averages
Trend definition
Historical volatility
Volatile definition
Relative Strength Index
Trend strength definition for up-trends
Trend strength definition for down-trends
Stochastics Oscillator
Bollinger Bands and Keltner Bands
Rate of Change %
ConnorsRSI
Conclusions
Testing the Candlestick Patterns
Universal back-test configuration:
Back-Testing questions
Why have I chosen the particular indicator settings?
Parameter robustness
Are delisted stocks included in the database?
Why have I have only tested on stocks over $5.00 and with at least 100,000 shares daily average volume?
Why have I chosen the particular dates used in the sample period?
Why do entries occur on the day following a signal?
What about Exits?
Why do I rank signals in order of largest volume?
What are your tests looking for?
Bullish Engulfing Pattern
The bullish engulfing pattern rules re-cap
The bullish engulfing pattern code
The bullish engulfing pattern test results (5 day holding period)
What is the best market environment for trading the bullish engulfing pattern?
Applying indicator filters to the bullish engulfing pattern
Applying stop-losses and profit targets to the bullish engulfing pattern
The final rules of the bullish engulfing pattern trading strategy
Test results for the bullish engulfing pattern trading strategy
The Morning Star Pattern
The morning star pattern rules re-cap
The morning star pattern code
The morning star pattern test results (5 day holding period)
What is the best market environment for trading the morning star pattern?
Applying indicator filters to the morning star pattern
Applying stop-losses and profit targets to the morning star pattern trading strategy
The final rules of the morning star pattern trading strategy
Test results of the morning star pattern trading strategy
The Piercing Pattern
The piercing pattern rules recap
The piercing pattern code
Piercing pattern test results (5 day holding period)
What is the best market environment for trading the piercing pattern?
Applying indicator filters to the piercing pattern.
Applying stop-losses and profit targets to the piercing pattern strategy.
The final rules of the piercing pattern trading strategy.
The test results of the improved piercing pattern
The Hammer Pattern
The Hammer pattern rules re-cap
The hammer pattern code
The hammer pattern psychology
The hammer pattern test results (5 day holding period).
What is the best market environment for trading the hammer candlestick pattern?
Applying indicator filters to the hammer candlestick pattern.
Applying stop-losses and profit targets to the hammer candlestick strategy
The final rules of the hammer candlestick pattern trading strategy.
Test results of the hammer pattern trading strategy.
The Bullish Kicker Pattern
The bullish kicker pattern rules re-cap.
The bullish kicker pattern code
The bullish kicker pattern psychology
The bullish kicker test results (5 day holding period)
What is the best market environment for trading the bullish kicker candlestick pattern?
Applying indicator filters to the bullish kicker candlestick pattern.
Applying stop-losses and profit targets to the bullish kicker trading strategy
The final rules of the bullish kicker pattern trading strategy.
Test results of the bullish kicker candlestick trading strategy.
The Bullish Harami Pattern
The bullish harami rules re-cap
The bullish harami pattern code
The bullish harami pattern psychology
The bullish Harami test results (5 day holding period)
What is the best market condition for trading the bullish harami pattern?
Applying indicator filters to the bullish harami candlestick pattern
Applying stop-losses and profit targets to the bullish harami candlestick pattern trading strategy
The final rules of the bullish harami pattern trading strategy
Test results for the bullish harami trading strategy
The Inverted Hammer
The inverted hammer pattern rules re-cap
The inverted hammer pattern code
The inverted hammer pattern psychology
The inverted hammer pattern test results (5 day holding period)
What is the best market condition for trading the inverted hammer candlestick?
Applying indicator filters to the inverted hammer candlestick pattern
Applying stop-losses and profit targets to the inverted hammer pattern trading strategy
The final rules of the inverted hammer pattern trading strategy
Test results for the inverted hammer trading strategy
Section 2. Bearish Candlestick Patterns
Trend strength definition for down-trends when going short
The Bearish Engulfing Pattern
The bearish engulfing pattern rules re-cap
The bearish engulfing pattern code
The bearish engulfing pattern test results (5 day holding period)
What is the best market condition for trading the bearish engulfing pattern?
Applying indicator filters to the bearish engulfing pattern
Applying stop-losses and profit targets to the bearish engulfing pattern
The final rules of the bearish engulfing trading strategy
Test results for the bearish engulfing trading strategy
The Evening Star Pattern
The evening star pattern rules re-cap
The evening star pattern code
The evening star pattern test results (5 day holding period)
What is the best market condition for trading the evening star pattern?
Applying indicator filters to the evening star pattern
Applying stop-losses and profit targets to the evening star pattern
The final rules of the evening star pattern trading strategy
Test results for the evening star pattern trading strategy
The Dark Cloud Cover Pattern
The dark cloud cover rules re-cap
The dark cloud cover pattern code
The dark cloud cover pattern test results (5 day holding period)
What is the best market environment for trading the dark cloud cover pattern?
Applying indicator filters to the dark cloud cover pattern
Applying stop-losses and profit targets to the dark cloud cover pattern
The final rules of the dark cloud cover pattern trading strategy
Test results for the dark cloud cover pattern
The Hanging Man Pattern
The hanging man pattern rules re-cap
The hanging man pattern code
The hanging man pattern test results (5 day holding period)
What is the best market environment for trading the hanging man pattern?
Applying indicator filters to the hanging man pattern
Applying stop-losses and profit targets to the hanging man pattern
The final rules of the hanging man pattern trading strategy
Test results for the hanging man pattern trading strategy
The Bearish Kicker Pattern
The bearish kicker rules re-cap
The bearish kicker pattern code
The bearish kicker pattern test results (5 day holding period)
What is the best market environment for trading the bearish kicker pattern?
Applying indicator filters to the bearish kicker pattern
Applying stop-losses and profit targets to the bearish kicker pattern
The final rules of the bearish kicker pattern trading strategy
Test results for the bearish kicker pattern trading strategy
The Bearish Harami Pattern
The bearish harami pattern rules re-cap
The bearish harami pattern code
The bearish harami pattern test results (5 day holding period)
What is the best market environment for trading the bearish harami pattern?
Applying indicator filters to the bearish harami pattern
Applying stop-losses and profit targets to the bearish harami pattern
The final rules of the bearish harami pattern trading strategy
Test results for the bearish harami pattern trading strategy
The Shooting Star Pattern
The shooting star pattern rules re-cap
The shooting star pattern code
The shooting star pattern test results (5 day holding period)
What is the best market condition for trading the shooting star pattern?
Applying indicator filters to the shooting star pattern
The final rules of the shooting star pattern trading strategy
Test results for the shooting star pattern trading strategy
Conclusions
Thank-You for Reading the Honest Guide to Candlestick Patterns