The Pattern Rank section in the Scanner module provides a detailed ranking of candlestick patterns based on their performance in different market conditions. This helps traders understand which patterns are more reliable and effective in bull or bear markets, and whether they tend to indicate reversals or continuations. Below is an explanation of the columns and terms used in this section:

Columns and Terms

• Patterns

  • This column lists the names of the candlestick patterns being analyzed, such as "8 New Price Lines," "Shooting Star, Two-Candle," etc.

• Reversals - Bull Market

  • The percentage of times the pattern leads to a reversal in a bull market. A reversal indicates that the pattern marks a change from an upward trend to a downward trend.

• Continuations - Bull Market

  • The percentage of times the pattern leads to a continuation in a bull market. A continuation indicates that the pattern marks a continuation of the upward trend.

• Reversals - Bear Market

  • The percentage of times the pattern leads to a reversal in a bear market. A reversal indicates that the pattern marks a change from a downward trend to an upward trend.

• Continuations - Bear Market

  • The percentage of times the pattern leads to a continuation in a bear market. A continuation indicates that the pattern marks a continuation of the downward trend.

Example Analysis

For each pattern listed, the table provides data on how often that pattern has resulted in reversals or continuations during both bull and bear markets. This allows traders to identify patterns that are more likely to signal reliable trading opportunities.

Example Interpretation

• 8 New Price Lines:

  • Reversals - Bull Market: 11%
  • Continuations - Bull Market: 89%
  • Reversals - Bear Market: 100%
  • Continuations - Bear Market: 0%
  • Interpretation: This pattern is more likely to indicate a continuation in a bull market but signals a reversal in a bear market.

• Shooting Star, Two-Candle:

  • Reversals - Bull Market: 100%
  • Continuations - Bull Market: 0%
  • Reversals - Bear Market: 100%
  • Continuations - Bear Market: 0%
  • Interpretation: This pattern consistently indicates reversals in both bull and bear markets.

This detailed analysis helps traders choose the most effective patterns for their strategies based on historical performance data in different market conditions. For a complete list of candlestick patterns and their detailed performance metrics, users can refer to Bulkowski's "Encyclopedia of Candlestick Charts."