Edition

IFTA JOURNAL
2017 EDITION
Conclusion
This study aimed mainly to complete the missing part in
the Japanese candlestick patterns, which is to calculate the
target levels by developing effective mathematical equations
to determine the expected target levels, depending on patterns
confirmation filters, to identify the most effective cases when
applying these equations, and to determine the most effective
of these equations. The study concluded the following:
1. The most effective cases applicable to calculating the target
levels depending on Patterns confirmation filters are the
cases that contain between 4 and 7 candles inside filters
respectively, where the percentage of success in accessing
one of the target levels was 88.71%, with a profit rate ranging
from +1.45% to +12.44%, and the rate of the time period to
access the target levels ranged from 2 to 38 trading days. On
the other hand, the failure rate to access one of the target
levels was 11.29%, with loss rate ranging from -3.99% to
-4.01%, and the rate of the time period to closing below or
above the stop loss and failure to access the target levels was
approximately equal to 7 trading days.
2. For the cases containing between 4 and 7 candles inside
filters, in general, the most effective mathematical equations
for determining the expected target levels depending on
patterns confirmation filters are 100% and 61.8% and 50%
respectively, where the rate of success in accessing one of
these levels is equal to 62.32%, with the profit rate ranging
from +5.10% to +12.44%. On the other hand, the failure rate
to access one of these levels is equal to 37.69%, with the loss
rate ranging from -3.99% to -4.01%.
3. The most ineffective cases applicable for calculating the
target levels depending on patterns confirmation filters
are the cases that contain 8 and 9 candles inside filters
respectively, because the failure rate of these cases is larger
than or equal to the success rate.
4. The lowest frequency cases applicable for calculating the
target levels depending on patterns confirmation filters are
the cases that contain 10 candles inside filters, where the
rate of appearance of these cases was only 3.29% of the total
cases of the study.
5. For the cases containing 4 candles inside filters, the most
effective mathematical equations for determining the
expected target levels depending on patterns confirmation
filters are 100% and 61.8% respectively, where the rate of
success in accessing one of these levels is equal to 62.13%,
with the profit rate ranging from +4.54% to +9.46%. On the
other hand, the failure rate to access one of these levels is
equal to 37.87%, with loss rate ranging from -3.82% to -3.87%.
6. For the cases containing 5 candles inside filters, the most
effective mathematical equations for determining the
expected target levels depending on patterns confirmation
filters are 100% and 61.8% and 50% respectively, where the
rate of success in accessing one of these levels is equal to
60.26%, with the profit rate ranging from +5.03% to +12.66%.
On the other hand, the failure rate to access one of these
levels is equal to 39.74%, with loss rate ranging from -3.50%
to -4.03%.
7. For the cases containing 6 candles inside filters, the most
effective mathematical equations for determining the
expected target levels depending on patterns confirmation
filters are 100% and 61.8% and 38.2% and 50% respectively,
where the rate of success in accessing one of these levels is
equal to 61.38%, with the profit rate ranging from +4% to
+17.22%. On the other hand, the failure rate to access one of
these levels is equal to 38.62%, with loss rate ranging from
-4.06% to -4.07%.
8. For the cases containing 7 candles inside filters, the most
effective mathematical equations for determining the
expected target levels depending on patterns confirmation
filters are 100% and 61.8% and 38.2% and 50% respectively,
where the rate of success in accessing one of these levels is
equal to 58.91%, with the profit rate ranging from +6.40% to
+20.55%. On the other hand, the failure rate to access one of
these levels is equal to 41.09%, with loss rate ranging from
-4.40% to -4.79%.
9. For the cases containing 8 candles inside filters, the most
effective mathematical equations for determining the
expected target levels depending on patterns confirmation
filters are 100% and 61.8% and 38.2% and 50% respectively,
where the rate of success in accessing one of these levels is
equal to 45.66%, with the profit rate ranging from +7.70% to
+26.85%. On the other hand, the failure rate to access one of
these levels is equal to 54.34%, with loss rate ranging from
-3.98% to -4.47%.
10. For the cases containing 9 candles inside filters, the most
effective mathematical equations for determining the
expected target levels depending on patterns confirmation
filters are 100% and 61.8% and 38.2% and 50% respectively,
where the rate of success in accessing one of these levels is
equal to 47.73%, with the profit rate ranging from +7.81% to
+29.92%. On the other hand, the failure rate to access one of
these levels is equal to 52.28%, with loss rate ranging from
-4.11% to -4.43%.
11. For the cases containing 10 candles inside filters, the most
effective mathematical equations for determining the
expected target levels depending on patterns confirmation
filters are 23.6% and 100% and 38.2% and 61.8% and 50%
respectively, where the rate of success in accessing one of
these levels is equal to 61.38%, with the profit rate ranging
from +5.43% to +32.07%. On the other hand, the failure rate
to access one of these levels is equal to 38.62%, with loss rate
ranging from -3.93% to -4.02%.
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