The candle pattern statistics in Table A below show the amount of data used in this analysis, the type of data used, and various other pertinent statistics. All common stocks on the New York Stock Exchange, the Nasdaq market, and the American Stock Exchange were used over a 13-year period. Using stock data prior to late 1991 would distort the analysis because most data services did not provide open prices then. When I wrote the first edition of my book in 1992, I had to use mostly futures data since stock data with open price was rare. Any discrepancies in the summary statistics are because not all of those stocks traded for the full analysis period.
A total pattern frequency of slightly more than 11% equates to one candle pattern about every nine trading days, 8.69 to be exact. This represents a good frequency for daily analysis of stocks and futures. Reversal patterns occur about 40 more times often than continuation patterns. This too is important, as it indicates the reversal of a trend caused by changed positions in trading. In this analysis, there were 65 reversal patterns and 23 continuation patterns, which make reversal patterns account for about 74% of all patterns.
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