3 Bullish Candlestick Patterns That Work — Backtesting and Historical Performance Analysis

This post shows you 3 bullish candlestick patterns that work. It turns out, perhaps surprisingly, that some candlestick patterns work reasonably well. We test Bearish Engulfing Pattern, Three Outside Down, and Bullish Harami.

We backtest the following trading rules:

1. Yesterday’s close is bigger than yesterday’s open, and

2. Today’s close is lower than today’s open, and

3. Today’s open is higher than yesterday’s close, and

4. Today’s close is lower than yesterday’s open

We test the Bearish Engulfing Pattern based on the rules above. Below is the equity curve and drawdown for the strategy.

You can find more info about this trading strategy here:
https://www.quantifiedstrategies.com/3-bullish-candlestick-patterns-that-work/