Do classic candlestick patterns have a real intraday edge? candlebench tests 66 patterns by turning every signal into a mechanical trade. It charges each trade the spread quoted at that time of day, and compares the result with random entries taken on the same days. A pattern counts only if it beats that control, makes money after costs, and holds up on dates it was not chosen on.
Live: interactive two-year results · interactive synthetic demo · results site
The run covers two years of 1-minute bars (October 2024 to October 2026) for 117 liquid US stocks and ETFs: 5,000 sampled symbol-days on 501 market dates and 1,021,358 pattern trades, charged an average quoted spread of 2.39 bps per leg. Four earlier runs came first (20 patterns on 50 symbols twice, 66 on 100, and 66 on 117 before the data was brought to one common date range), so the multiple-comparison correction counts five experiments.
- No pattern earns
EDGE. None of the 66 has positive expectancy after costs, and 59 have 95% intervals entirely below zero. - No pattern beats random entry, even before costs. Compared in gross R with its own stop-matched random entries, no row survives multiple-comparison correction.
- Random entry itself loses about 0.34R per trade at 1m, almost all of it spread. Before costs, the two controls sit at +0.015R and +0.009R.
- "No edge" has a size. Each row reports the smallest advantage its test would catch 80% of the time. For the 19 patterns with over 20,000 trades that is 0.018R to 0.034R, so an advantage over random entry larger than that would very likely have been found. Rare patterns report 0.085R or more; the rarest, the abandoned babies, trade too seldom to measure.
- The same holds at 5, 15 and 60 minutes. A second run over the same two years and 117 symbols sampled 5,000 symbol-days per timeframe (227,879 pattern trades, 2.21 bps per leg). No pattern beats its matched controls at any of the three. Random entry loses 0.15R to 0.25R net there, less than at 1m because the spread is a smaller share of a wider stop. At 5m the tweezers would reveal an advantage of 0.05R; at 1h, trades are too few to rule out less than about 0.2R. Interactive · report.
An earlier version of this project reported that eight patterns beat random entry on signal alone and lost only to costs. That came from a measurement bias the project later found in its own method; the next section explains it.
The method has to find nothing where nothing exists. candlebench.synthetic
generates a random walk that no pattern can predict, and
a calibration run counts how often each
test passes on it anyway.
It exposed two real flaws, and both are fixed:
- Net R rewards wide stops. Costs are a fixed number of bps, and R divides by the distance to the stop, so a pattern with a wider stop pays fewer R for the same spread. Compared with random entry in net R, wide-stop patterns "won" with no signal at all: 38 of 800 rows across ten seeds, at least one in every run.
- A control with a different stop is not a fair control. Even before costs, a tighter stop is caught more often by the rule that a bar touching both levels is a stop. Each pattern trade is now compared with its own matched control. The control has the same direction and stop distance and the same exit code, and enters on a random bar one to five bars later. Entering earlier turned out to be a trap: those bars were selected by the pattern itself, and a control placed five bars before a tweezer top lost 0.56R on pure noise.
With both fixes, 1 row in 800 passes on the random walk, in 1 run of 10, which is what a 5% familywise error rate predicts. Profitability is still tested net of costs.
Finding nothing in noise is half the check; a method that never finds anything passes it too. The power study plants edges of known size in independent synthetic markets and runs the real-data design over them. With all 66 patterns, an advantage of 0.144R was caught every time and 0.097R half the time, bracketing the 0.11R limit each row reports. It also shows that making money needs a gross edge above about 0.3R, and that a single 20% holdout confirms only large edges; walk-forward confirmation pools every fold's out-of-sample trades and confirms far more.
Other safeguards:
| Concern | What the code does |
|---|---|
| Lucky draws | Every pattern trade is paired with a random-entry control in the same session, with the same direction and stop distance. Matched-rate random-entry rows show what random entry loses at each timeframe. |
| Correlated trades | Bootstrap intervals resample whole market dates, not individual trades. |
| Many comparisons | Holm correction across every row and timeframe, plus a declared-experiment multiplier. A run warns when bootstrap resolution makes passing impossible. |
| Overfitting | The newest 20% of dates are held out. Only discovery candidates are tested on them, and EDGE needs both samples. |
| Flattering fills | Entry is on the next bar. A bar touching both stop and target counts as a stop unless it opened past the target. Gaps fill at the open. |
| Optimistic costs | The quoted model samples NBBO spreads per symbol and time of day, because the open runs about 4x midday. Borrowed buckets and estimates are reported separately from observed ones. |
| Tiny samples | A verdict needs at least 30 trades and 10 independent dates; a 3-trade "+0.95R" stays INSUFFICIENT. |
The demo needs no API key or download:
python -m venv .venv && source .venv/bin/activate
pip install -e .
candlebench demo # synthetic market -> full run -> dashboard on :8765The demo generates eight symbols of synthetic 1m bars and runs every pattern at three timeframes in a few seconds. It then opens the dashboard on that run. Every leaderboard row drills down to its equity curve, its per-symbol and time-of-day breakdowns, and each session's chart with the trades drawn on it.
candlebench report out.json # out.html: one self-contained file, no scripts
candlebench site out.json --out app/ # the interactive dashboard as static files
docker build -t candlebench-demo . # or served live and read-only
docker run --rm -p 8765:8765 candlebench-demo
fly deploy # the same container on Fly.io (fly.toml)candlebench site exports the full dashboard for one run as plain files, so
any static host serves it with no server. A browser test sends every query to
the live server and to the exported copy and requires identical answers.
A report holds the summary, a leaderboard per timeframe, and a drill-down for
every pattern. Trades appear only as R multiples and dates, never as prices, so
a report built from licensed market data can be published. The dashboard can
download any saved run as a report. serve --read-only shows saved runs but
refuses to start work, and only a read-only server will listen beyond loopback.
The results site is rebuilt
by CI on every push.
Two years of intraday history come from Alpaca's free market-data API. Yahoo Finance needs no key but serves only about a month. Keys are read from the environment only, never from a config file or the browser.
export ALPACA_API_KEY=... ALPACA_SECRET_KEY=...
# in config/backtest.toml: source = "alpaca", and model = "quoted" for real spreads
candlebench fetch # download and cache bars
candlebench quotes --sessions 4 # sample NBBO spreads into a table
candlebench run -v --json out.json # terminal leaderboard; trades go to out.parquet
candlebench serve # dashboardA 200-trial run over two years of 1m bars takes about 20 seconds and peaks under
1 GiB of memory; the published 5,000-trial run over 117 symbols and 66 patterns
took 7 to 25 minutes on one shared core and peaked at 4.0 GiB. Its trade file is 40 MB, so
the published trade files sit on the
data release
rather than in git; docs/results/ keeps the JSON summaries.
- Over 690 tests, including 27 headless-Chromium tests. CI runs them on Python 3.11 and 3.12, along with Pylint and a clean-environment wheel install.
- Every run says what produced it. Reports carry the git commit, package versions, a hash of the effective config, and a content hash of every cached file the run read, so two runs that disagree can be told apart.
- Browser input is untrusted. Every field is type-, range- and path-checked before it reaches a file path or a DataFrame. Malformed requests get a 400 or 404 with a reason, never a traceback.
- Nothing half-written is ever published. Bar caches, trade files and run reports are written to a temporary file and renamed. A run becomes the latest only after its report, trades and archive copy are all saved. An incomplete refresh keeps the cached history rather than shortening it.
- Unavailable is never zero. A missing statistic is
Noneand is shown asn/a. A cost that was estimated is never labelled observed. - Standard-library web server, no frontend build. The dashboard is one dependency-free page with hand-drawn SVG charts. CI also builds the demo container and checks that it serves read-only.
candlebench/
bars.py alpaca.py ticks.py synthetic.py data sources, validation, Parquet cache
quotes.py costs.py observed spreads and the fallback estimator
patterns/ 20 detectors and the random controls
sampling.py engine.py runner.py paired trials -> trades -> results
metrics.py leaderboard.py clustered bootstrap, Holm, detection limits, verdicts
report.py site.py shareable HTML report, static interactive export
web/ loopback server, dashboard, run history
scripts/null_calibration.py false-positive check on a random walk
scripts/detection_power.py power curve from planted edges
- Guide: commands, the trade and cost models, reading the leaderboard, configuration, data sources and historical measurements.
- Experiment reports: null calibration, detection power, matched-control entry window, robustness to clustered volatility and rare patterns, walk-forward confirmation, trade-management sweep and stop-buffer sweep.
- Data and cost measurements.
stock.py: a separate companion script that scores one ticker for long-term, swing and day trading from current fundamentals and technicals. It shares no code with candlebench.
This measures 66 textbook patterns under one mechanical trade rule: a stop at the pattern's extreme, a fixed reward multiple and a holding cap. It does not show that no candlestick-based strategy could work. The universe is 117 liquid stocks and ETFs that exist today, so it carries survivorship bias. Quotes are sampled, not complete, and the tested history covers two years. Read the guide's caveats before relying on any number here.
MIT licensed.