skip to main content
10.1145/3277139.3277161acmotherconferencesArticle/Chapter ViewAbstractPublication PagesimmsConference Proceedingsconference-collections
research-article

An analyze on effectiveness of candlestick reversal patterns for Vietnamese stock market

Published: 25 August 2018 Publication History

Abstract

The Japanese candlestick model is a common technical analysis used to understand the behavior and predict the trend in the financial market. There are many studies have been conducted to assess the effectiveness of candlestick patterns in different markets. This paper describes an empirical research to examine the predictability and profitability of the candlestick reversal patterns analysis on the Vietnamese stock market over the period from Jan 2, 2013, to May 15, 2018. The purpose is to determine whether candlesticks patterns can be used to achieve significant gains or to predict future price trends. We apply the use of Pivot Simple Moving Average to indicate the reversal signals of the market and compute the profit. Our results show the tested reversal candlesticks do not demonstrate the ability to predict the market trend and generated profitability is low on the stock market in Vietnam. The main contribution of this paper is a statistical analysis of the effectiveness of candlestick patterns as predictors of the behavior of those stocks.

References

[1]
http://www.ssc.gov.vn, 14-May, 2018
[2]
Yuen, Raymond Wai Pong, Fundamental Analysis vs. Technical Analysis (May 5, 2012). Available at SSRN: https://ssrn.com/abstract=2051485 or
[3]
Elton, Edwin J. and Gruber, Martin J. and Brown, Stephen J. and Goetzmann, William N. (2009): Modern Portfolio Theory and Investment Analysis, 9th edition, John Wiley & Sons, Inc.
[4]
Nison Steve (1991): Japanese candlestick charting techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East (1st edition, New York Institute of Finance).
[5]
Morris, Gregory L. (2006): Candlestick Charting Explained: Timeless Techniques for Trading Stocks and Futures (3rd Edition The McGraw-Hill Companies, Inc).
[6]
Marshall, Young and Rose (2006): Candlestick technical trading strategies: Can they create value for investors?, Journal of Banking & Finance 30, pp 2303--2323
[7]
Goo, Chen and Chang (2007): The Application of Japanese ndlestick Trading Strategies in Taiwan, Investment Management and Financial Innovations, Volume 4, Issue 4.
[8]
Marshall, Young and Chang (2008): Are candlestick technical trading strategies profitable in the Japanese equity market?, Review of Quantitative Finance and Accounting 31, pp 191--207.
[9]
Horton, Marshall J. (2009): Stars, crows, and doji: The use of candlesticks in stock selection, The Quarterly Review of Economics and Finance 49, pp 283--294.
[10]
Max Jönsson: The Predictive Power of Candlestick Patterns An Empirical Test of Technical Indicators on the Swedish Stock Market Using GARCH-M and Bootstrapping, Department of Economics NEKH01, Bachelor Thesis, Spring 2016, Lund University.
[11]
Hércules A. do Prado et al: On the effectiveness of candlestick chart analysis for the Brazilian stock market, 7th International Conference in Knowledge Based and Intelligent Information and Engineering Systems.
[12]
Lu, T., Y. Chen, and Y. Hsu. 2015. "Trend Definition or Holding Strategy: What Determines the Profitability of Candlestick Charting?" Journal of Banking & Finance 61: 172--183.
[13]
Tsung-Hsun Lu & Yung-Ming Shiu (2016): Can 1-day candlestick patterns be profitable on the 30 component stocks of the DJIA?, Applied Economics
[14]
F. Martinssson and I. Liljeqvist, 'Short-Term Stock Market Prediction Based on Candlestick Pattern Analysis', Dissertation, 2017.
[15]
http://www.cophieu68.vn/export.php (24-May, 2018).
[16]
FRANKLIN O. OCHOA, JR: PROFITING WITH PIVOT-BASED MOVING AVERAGES, PivotBoss.com
[17]
Takenori Kamo and Cihan Dagli: "Fuzzy Logic-Based Japanese Candlestick Pattern Recognition and Financial Forecast", Intelligent Engineering Systems Through Artificial Neural Networks, Volume 17
[18]
Qiujun Lan, Dan Zhang, Longling Xiong: Reversal Pattern Discovery in Financial Time Series Based on Fuzzy Candlestick Lines, Systems Engineering Procedia Volume 2, 2011, Pages 182--190

Cited By

View all
  • (2021)An Empirical Research on the Effectiveness of Different LSTM Architectures on Vietnamese Stock Market2020 International Conference on Control, Robotics and Intelligent System10.1145/3437802.3437827(144-149)Online publication date: 4-Jan-2021
  • (2021)Do Candlestick Patterns Work in Cryptocurrency Trading?2021 IEEE International Conference on Big Data (Big Data)10.1109/BigData52589.2021.9671826(4566-4569)Online publication date: 15-Dec-2021
  • (2020)Exploring the Use of Data at Multiple Granularity Levels in Machine Learning-Based Stock Trading2020 International Conference on Data Mining Workshops (ICDMW)10.1109/ICDMW51313.2020.00053(333-340)Online publication date: Nov-2020
  • Show More Cited By

Index Terms

  1. An analyze on effectiveness of candlestick reversal patterns for Vietnamese stock market

    Recommendations

    Comments

    Information & Contributors

    Information

    Published In

    cover image ACM Other conferences
    IMMS '18: Proceedings of the 1st International Conference on Information Management and Management Science
    August 2018
    240 pages
    ISBN:9781450364867
    DOI:10.1145/3277139
    • Conference Chair:
    • Shuliang Li
    Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

    Publisher

    Association for Computing Machinery

    New York, NY, United States

    Publication History

    Published: 25 August 2018

    Permissions

    Request permissions for this article.

    Check for updates

    Author Tags

    1. candlestick
    2. profitability
    3. technical analysis
    4. trend prediction
    5. vietnamese stock market

    Qualifiers

    • Research-article

    Conference

    IMMS 2018

    Contributors

    Other Metrics

    Bibliometrics & Citations

    Bibliometrics

    Article Metrics

    • Downloads (Last 12 months)9
    • Downloads (Last 6 weeks)2
    Reflects downloads up to 20 Jan 2025

    Other Metrics

    Citations

    Cited By

    View all
    • (2021)An Empirical Research on the Effectiveness of Different LSTM Architectures on Vietnamese Stock Market2020 International Conference on Control, Robotics and Intelligent System10.1145/3437802.3437827(144-149)Online publication date: 4-Jan-2021
    • (2021)Do Candlestick Patterns Work in Cryptocurrency Trading?2021 IEEE International Conference on Big Data (Big Data)10.1109/BigData52589.2021.9671826(4566-4569)Online publication date: 15-Dec-2021
    • (2020)Exploring the Use of Data at Multiple Granularity Levels in Machine Learning-Based Stock Trading2020 International Conference on Data Mining Workshops (ICDMW)10.1109/ICDMW51313.2020.00053(333-340)Online publication date: Nov-2020
    • (2019)Combining News Sentiment and Technical Analysis to Predict Stock Trend Reversal2019 International Conference on Data Mining Workshops (ICDMW)10.1109/ICDMW.2019.00079(514-521)Online publication date: Nov-2019

    View Options

    Login options

    View options

    PDF

    View or Download as a PDF file.

    PDF

    eReader

    View online with eReader.

    eReader

    Media

    Figures

    Other

    Tables

    Share

    Share

    Share this Publication link

    Share on social media