Measuring Candlestick Pattern Follow-Through and Breakout Rates
Summary
The article presents an Expert Advisor that measures historical outcomes for Doji, Engulfing, and Pinbar patterns. It scans bars for each formation, then checks whether price moves in the suggested direction on the next bar, within a configurable forward window, or after breaking the pattern’s high or low by a specified distance and receiving confirmation. Results are aggregated by pattern and can be reported as counts and percentages, with optional volume-weighted rates and CSV export.
The author illustrates the tool with example calculations and comparisons across instruments, including Boom 300 and Step Index, where some pattern outcomes differ. The article stresses that patterns can fail and that results depend on instrument, timeframe, sample, and chosen parameters. These historical rates are descriptive research, not proof of a predictive edge; the text recommends independent validation before using results in trading.
Key ideas
- The tool classifies Doji, Engulfing, and Pinbar formations in historical bars.
- It measures next-bar direction, follow-through within a chosen window, and confirmed breakouts.
- Pattern outcomes can be summarized as raw-count rates or weighted by trading activity.
- Reported comparisons vary across instruments, which cautions against assuming universal pattern behavior.
- Historical success rates require further validation and do not establish a live trading edge.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.