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Review of Quantitative Finance and Accounting

, Volume 31, Issue 2, pp 191–207 | Cite as

Are candlestick technical trading strategies profitable in the Japanese equity market?

  • Ben R. Marshall
  • Martin R. Young
  • Rochester Cahan
Original Paper

Abstract

We show that candlestick charting, the oldest known form of technical analysis, is not profitable in the Japanese equity market over the 1975–2004 period. Candlestick technical analysis, which was developed in Japan in the 1600s, is deeply intertwined with Japanese culture and is very popular in Japan. However, there is no evidence candlestick technical trading strategies add value in either the entire 30 year period, in three 10 year sub-periods or in bull or bear markets.

Keywords

Candlestick Technical analysis Japan Market timing 

JEL Classifications

G12 G14 

Notes

Acknowledgments

We thank the editor, Cheng-few Lee, and two anonymous referees for comments that have improved the paper.

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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  • Ben R. Marshall
    • 1
  • Martin R. Young
    • 1
  • Rochester Cahan
    • 1
  1. 1.Department of Finance, Banking and Property, College of BusinessMassey UniversityPalmerston NorthNew Zealand

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