Our 20-point test reveals the best stock chart candlestick pattern recognition software are TrendSpider, TradingView, and Finviz.
Based on our testing of 1,892 trades, the tweezer top and bottom patterns are highly unreliable and unprofitable. These patterns exhibit a reward-to-risk ratio of only 1.07, with 50% of trades resulting in losses. Relying on tweezers as a trading strategy yields poor results.
Our research shows that Heikin-Ashi charts are better than candlesticks for maximizing returns in trading strategies. We backtested 360 years of data across 30 major, and our findings prove that Heikin-Ashi chart strategies outperform 60% of equities vs. a buy-and-hold strategy.
According to 2,219 tested trades, a Hammer is extremely unreliable and unprofitable. It has a low % accuracy rate of 52.1%, resulting in a razor-thin 0.18% profit per trade.
The Dragonfly Doji is a candlestick chart pattern that indicates an equilibrium between buyers and sellers after a day of trading volatility. Our 1,703 test trades prove it can be profitable under the right circumstances, but the margins are thin.
A Doji candlestick chart pattern indicates a battle between buyers and sellers, ending in equilibrium. The Doji marks a potential trend reversal. Is the Doji pattern profitable or accurate? Our evidence suggests its profitability is marginal.
Our research shows the most reliable and predictive candlestick patterns are the Inverted Hammer, with a 60% success rate, Bearish Marubozu (56.1%), Gravestone Doji (57%), and Bearish Engulfing (57%). The most profitable candle pattern is the Inverted Hammer, with a 1.12% profit per trade.
Our research shows the Bearish Engulfing candle is an accurate and profitable pattern. Our 568 years of data reveals a 57% success rate and an average win of 3.7%.
Our research shows the Bullish Engulfing candle is not as bullish as most traders believe. Based on 568 years of data, it has a 55% success rate and an average win of 3.5%.
Our research shows Bullish Harami and Bullish Harami Cross are profitable patterns. Based on 1,112 years of data, the bullish Harami has an average profit per trade of 0.5% and the Harami Cross 0.58%.
Our research shows Bearish Marubozu candles are among the most profitable patterns. Based on 568 years of data, it has a 56.1% success rate and an average win of 4.1%. Conversely, the Bullish Marubozu is one of the worst.
Our research shows the Inverted Hammer is the most accurate and profitable candlestick pattern. Used as a bullish signal, it has a 60% success rate and an average win of 4.2%, based on 588 years of data.
Based on 568 years of data, our research shows the Shooting Star candle is bullish, not bearish, as most traders believe. It has a 57.1% upside success rate and an average winning trade of 3.6%. Each trade made using a shooting star nets an average of 0.56% profit.
Our research shows Bearish Harami and Bearish Harami Cross are profitable patterns. Based on 1,136 years of data, the Bullish Harami has an average profit per trade of 0.48% and the Harami Cross 0.57%.
A Gravestone Doji candle indicates a battle between buyers and sellers and is considered bearish. Our 1,553 test trades prove it is the third most profitable candle pattern. But it does not work as most traders believe.
You can read candlestick charts using pattern recognition software to identify five reliable patterns, the Inverted Hammer, Bearish Marubozu, Gravestone Doji, Bearish Engulfing, and Bullish Harami Cross.
Our original research found that the Spinning Top candle is a bullish pattern, with a 55.9% success rate and a 3.7% average winning trade. Trading with a Spinning Top yields an average profit of 0.49%, ranking it the 10th best candle to trade.
Our Best Training & Strategies
Learn stock market investing with the complete online stock trading course by Barry D. Moore, a certified financial analyst from the International Federation of Technical Analysts (IFTA).
The MOSES ETF investing strategy is a powerful suite of indicators meticulously backtested over 100 years. Designed to empower you to outperform the market, it equips you with the tools to navigate major stock market crashes and unlock greater investing performance.
Decades of research and testing unveiled the Liberated Stock Trader Beat the Market System. Our 9-year, backtested, and proven strategy targets 35 financially healthy high-growth stocks, producing a track record of beating the S&P 500 by 102%.
Our extensive review testing rates TradingView 4.7/5 stars due to excellent stock chart analysis, pattern recognition, screening, and backtesting. TradingView is our top recommendation for US and international traders.
Our Stock Rover review reveals an excellent stock screening, research, and portfolio tool for long-term US value, income, and growth investors. Easy to use yet incredibly powerful, Stock Rover is the best stock screener available for US investors.
Trendspider uses AI to recognize trendlines, chart patterns, and candlesticks automatically. Automated trading bots and powerful backtesting make it an innovation leader.
Our Benzinga Pro review reveals trustworthy, dependable, real-time news, alerts, insider block trade, and options activity signals for US stock traders. Benzinga Pro is highly configurable, responsive, and easy to use while beating its competitors on price.
Our MetaStock review testing reveals powerful charting, system backtesting, forecasting, and Xenith real-time financial news for traders. MetaStock has unbeatable charts, indicators, and drawing tools, but it needs to be a little easier to use.