Do candlestick patterns work in cryptocurrency trading?

Kin-Hon HO, Tse Tin David CHAN, Haoyuan PAN, Chin LI

Research output: Chapter in Book/Report/Conference proceedingChapters

4 Citations (Scopus)

Abstract

This paper investigates the effectiveness of candlestick patterns in cryptocurrency trading. Our data set includes historical daily opening, high, low, and closing prices of the top 23 cryptocurrencies by market capitalization. We examine 68 commonly used candlestick patterns using statistical analysis and find that the studied candlestick patterns are of little use in cryptocurrency trading. On the contrary, there are more patterns with relatively low accuracy. Investors should be cautious with their trading strategies and decisions when these patterns appear, as they may be a false trading signal that could cause losses rather than gains. To the best of our knowledge, this paper is one of the first research studies to investigate the effectiveness of candlestick patterns in cryptocurrency trading. Our findings could serve as a reference for investors when developing cryptocurrency trading strategies. Copyright © 2022 IEEE.

Original languageEnglish
Title of host publicationProceedings of 2021 IEEE International Conference on Big Data (Big Data)
Place of PublicationDanvers, MA
PublisherIEEE
Pages4566-4569
ISBN (Electronic)9781665439022
DOIs
Publication statusPublished - 2022

Citation

Ho, K.-H., Chan, T.-T., Pan, H., & Li, C. (2022). Do candlestick patterns work in cryptocurrency trading? In Proceedings of 2021 IEEE International Conference on Big Data (Big Data) (pp. 4566-4569). Danvers, MA: IEEE.

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