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Market Timing with Candlestick Technical Analysis

18 Pages Posted: 16 Apr 2007 Last revised: 14 Sep 2009

Ben R. Marshall

Massey University - School of Economics and Finance

Martin R. Young

Massey University - School of Economics and Finance

Lawrence C. Rose

Massey University

Date Written: April 16, 2007

Abstract

We investigate the profitability of the quantitative market timing technique of candlestick technical analysis in the U.S. equity market. Despite being used for centuries in Japan and now having a wide following amongst market practitioners globally, there is little research documenting its profitability or otherwise. We find that these strategies are not generally profitable when applied to large U.S. stocks. Basing trading decisions solely on these techniques does not seem sensible but we cannot rule out the possibility that they compliment some other market timing techniques.

Keywords: Market Timing, Candlesticks, Technical Analysis, Quantitative Investment

JEL Classification: G12, G14

Suggested Citation

Marshall, Ben R. and Young, Martin R. and Rose, Lawrence C., Market Timing with Candlestick Technical Analysis (April 16, 2007). Available at SSRN: https://ssrn.com/abstract=980583 or http://dx.doi.org/10.2139/ssrn.980583

Ben R. Marshall (Contact Author)

Massey University - School of Economics and Finance ( email )

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Martin R. Young

Massey University - School of Economics and Finance ( email )

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New Zealand

Lawrence (Larry) Craig Rose

Massey University ( email )

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Auckland, 0745
New Zealand
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+64 9 441 8150 (Fax)

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