Frequency Analysis of Ordered Double-Candlestick Patterns
Summary
The article extends encoded candlestick frequency analysis from single bars to ordered pairs. It describes a process that classifies candles into symbols, scans consecutive overlapping pairs, counts each unique sequence, and ranks sequences by frequency across GBPUSD and gold on H1, M15, and M5. Since order matters, a pair such as Aa is counted separately from aA. The article also distinguishes results that include unclassified candles from results limited to fully classified pairs.
Across the reported examples, unclassified symbols appear often in the most frequent pairs. In GBPUSD M5 and M15, the leading fully classified patterns primarily combine bullish and bearish Marubozu categories, with alternating and repeated forms prominent. The analysis is exploratory: counts describe prevalence in the sampled histories, not predictive power or profitability. The author recommends separate forward-return and strategy testing, and notes that collapsing diverse candles into one unclassified symbol limits interpretation.
Key ideas
- Consecutive candle pairs can be analyzed as ordered sequences, so reversing a pair creates a distinct pattern.
- The method encodes candle types, counts overlapping pairs, and ranks them by frequency and percentage.
- Unclassified candles feature prominently in the most frequent pairs in the reported GBPUSD examples.
- Fully classified GBPUSD pairs are dominated by combinations of bullish and bearish Marubozu symbols.
- Frequency alone does not establish that a candle sequence predicts returns or supports a profitable strategy.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.