Candle patterns: 4 Backtests
We backtested 4 candle patterns strategies across US stocks. 0 beat the benchmark before correction; best −17.6 pts/yr.
Every result below is the strategy's annualized return minus an equal-weight benchmark, rebalanced daily, on the same assets and days. Strategies are charged real trading costs; the benchmark pays none. Data stops at the discovery cutoff. See the full family index, the full method and every result, or download the raw registry (JSON).
0 of 4 strategies finished ahead of the benchmark on the raw number, and 0 had an unadjusted p-value under 0.05. After one correction across all 647 tests in the registry, 0 passed, so no result here is a confirmed edge. Scored 2026-10-03, using data up to 2025-03-15. Method: see the evidence page.
How to read these results
"Ahead" means a higher return than the benchmark in this historical test, and "behind" means a lower one. Neither is a confirmed edge. A strategy is only counted as working if it survives a correction for how many strategies were tried, because testing hundreds of ideas will throw up some lucky winners by chance. Candle patterns is grouped by the signal it trades on, not by the asset it was tested on, and every strategy here saw only data up to the same cutoff date, so none could see data another could not.
Results
- Does the morning-star candlestick pattern work on stocks? (US stocks): behind the benchmark by 17.6 percentage points a year. Not statistically significant. Source: retail trading content: morning star candlestick daily stock trading strategy.
- Does the bullish kicker candlestick pattern work on stocks? (US stocks): behind the benchmark by 17.9 percentage points a year. Not statistically significant. Source: retail trading content: bullish kicker candlestick reversal stock strategy.
- Does the rising-three-methods continuation pattern work? (US stocks): behind the benchmark by 18.0 percentage points a year. Not statistically significant. Source: retail trading content: rising three methods five candle continuation stock strategy.
- Does a bullish harami with three-inside-up confirmation work? (US stocks): behind the benchmark by 18.0 percentage points a year. Not statistically significant. Source: retail trading content: bullish harami three inside up stock strategy.