Mastering Financial Pattern Recognition 9781098120474

Candlesticks have become a key component of platforms and charting programs for financial trading. With these charts, tr

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Mastering Financial Pattern Recognition
 9781098120474

Table of contents :
Preface
Why This Book?
Target Audience
Conventions Used in This Book
Using Code Examples
O’Reilly Online Learning
How to Contact Us
Acknowledgments
1. Importing and Processing Financial Data in Python
Installing the Environment
Creating the Importing Algorithm
Putting It All Together
Summary
2. Algorithmic Mindset and Functions
Coding the Primal Functions
The Function to Add Columns to an Array
The Function to Delete Columns from an Array
The Function to Add Rows to an Array
The Function to Remove Rows from an Array
The Function to Round Numbers
Coding Signals
Creating the Signal Charts
Coding Performance Evaluation Functions
The Hit Ratio
The Rate of Return
The Profit Factor
The Risk-Reward Ratio
The Number of Trades
Creating a Performance Evaluation Function
A Hypothetical Example: Appraising Performance
3. Introducing Technical Analysis
Charting Analysis
Indicator Analysis
Moving Averages
The Relative Strength Index
Pattern Recognition
Common Pitfalls of Technical Analysis
Wanting to Get Rich Quickly
Forcing the Patterns
Hindsight Bias, the Dream Smasher
Assuming That Past Events Have the Same Future Outcome
Making Things More Complicated Than They Need to Be
Technical Analysis Best Practices
Harness the Power of Different Time Frames
Use More Than One Strategy or Indicator
Choose the Right Type of Strategy for Current Market Conditions
Don’t Underestimate Default Parameters
4. Classic Trend-Following Patterns
The Marubozu Pattern
The Three Candles Pattern
The Tasuki Pattern
The Three Methods Pattern
The Hikkake Pattern
5. Modern Trend-Following Patterns
The Quintuplets Pattern
The Double Trouble Pattern
The Bottle Pattern
The Slingshot Pattern
The H Pattern
6. Classic Contrarian Patterns
The Doji Pattern
The Dragonfly Doji
The Gravestone Doji
The Flat Doji
The Double Doji
The Tri Star Doji
The Harami Pattern
The On Neck Pattern
The Tweezers Pattern
The Stick Sandwich Pattern
The Hammer Pattern
The Star Pattern
The Piercing Pattern
The Engulfing Pattern
The Abandoned Baby Pattern
The Spinning Top Pattern
The Inside Up/Down Pattern
The Tower Pattern
7. Modern Contrarian Patterns
The Doppelgänger Pattern
The Blockade Pattern
The Euphoria Pattern
The Barrier Pattern
The Mirror Pattern
The Shrinking Pattern
8. Advanced Candlestick-Charting Systems
Heikin-Ashi System
Detecting the Doji Pattern
Detecting the Tasuki Pattern
Detecting the Euphoria Pattern
Detecting the Double Trouble Pattern
K’s Candlesticks System
Detecting the Doji Pattern
Detecting the Tasuki Pattern
Detecting the Euphoria Pattern
Detecting the Double Trouble Pattern
9. Candlestick Patterns Exit Techniques
The Symmetrical Exit Technique
The Fixed Holding Period Exit Technique
The Variable Holding Period Exit Technique
The Hybrid Exit Technique
Pattern Invalidation
10. Candlestick-Based Trend-Following Strategies
Combining the Double Trouble Pattern with the RSI
Combining the Three Candles Pattern with Moving Averages
Combining the Bottle Pattern with the Stochastic Oscillator
Combining the Marubozu Pattern with K’s Volatility Bands
Combining the H Pattern with the Trend Intensity Index
11. Candlestick-Based Contrarian Strategies
Combining the Doji Pattern with the RSI
Combining the Engulfing Pattern with Bollinger Bands
Combining the Piercing Pattern with the Stochastic Oscillator
Combining the Euphoria Pattern with K’s Envelopes
Combining the Barrier Pattern with the RSI-ATR
12. Risk Management and Trading Psychology
Basics of Risk Management
Stops and Targets
Trailing Stops
Position Sizing
Economic Calendar
Behavioral Finance: The Power of Biases
Cognitive Biases
Emotional Biases
Trading Framework
Index
About the Author

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