Testing Rebounds After a Five-Day Three-Wave Decline Pattern

Summary

The post describes a simple pattern study on constituents of the CSI 300. It defines a five-day sequence: the first day falls by more than 1%, the second falls by more than 2%, the third moves either way but rises no more than 1%, the fourth rises by more than 3%, and the fifth falls by more than 4%. The author then checks whether the following day rises.

The reported result is a 73% probability of an up day after the pattern appeared in the sample over the prior year. The post does not provide the number of occurrences, return magnitudes, distribution of outcomes, comparison benchmark, or details on data handling. It also does not clarify whether overlapping signals were counted or how trading costs and other implementation constraints would affect a strategy. The result is therefore a preliminary frequency observation, not a fully documented or validated trading edge.

Key ideas

• The pattern is defined by specific daily percentage moves over five sessions.
• The study examines the probability of an advance on the day after the pattern.
• The author reports a 73% next-day rise frequency for CSI 300 sample stocks over the prior year.
• The post does not report sample size, return distribution, or trading costs.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.