There is no mean reversion in arbitrage. There is a price, call it apt, and an entry point, if apt is at least far enough away from your statistical analysis of plain autotraded stops and targets then apt if bigger enough than the entry point should be when to put on the trade. There's a little more data in the candlestick from o,h,l,c and using those is only a matter of computing your targets really, and all else the opens and closes are what you'll end up with as you decide which data to use in your projection. The projection does not assume mean reversion but trending and as I've had the experience trying to explain this analytical difference between mean rev and trend we shouldn't say much more than that there is a difference which is exactly what you'd say.
Yes, I had the brains reversed. Thanks for the correction --- Years ago some quants and I tested the basic candlestick patterns as described on lit wick.com--- there was nothing significant that couldn't be ascribed to randomness.
Buyers drove it up... then Buyers thought nope, and began exiting and/or Sellers said hell yeah and overpowered One candle does not a story tell - but together Wicks on top reflect weakness - or price being held down till the transfer / position is complete - or even supported till the transfer/ position is complete Gotta read the entire story up to it.., not one page RN
One needs to be centric (or right/ left balanced) Having a dominant side - you're screwed (I know as I had one, and had to reset) RN
Please stay away from them codes of candlestick patterns. They weren't design to be used that way and candlestick patterns without context are unreliable. You should have just read any one of the hundreds of papers by traders that were not profitable and by those that were profitable using Japanese Candlestick patterns. You would have immediately notice the performance difference between coders and discretionary traders of Japanese Candlestick patterns. Yet, there is one particular usefulness for coding Japanese Candlestick patterns...using such as a dictionary description only to familiarize yourself with their names. Not uncommon to see someone call a Harami pattern an Engulfing pattern or calling a Inverted Hammer Pattern a Shooting Star.
You took a little heat with that green bar just after you entered (8 min in) - way to hang in there ======================== There is a lesson here folks Know your stop - stick to the damn thing Moving it to BE - look what he could have potentially missed if he had been stopped out, then had to re-enter RN