Candlestick names need volume-price, ADX, and moving-average checks

Names are not hypotheses

A candlestick name is only a label. It is not, by itself, a reversal or continuation hypothesis.

TradersWeek editorial reading is that the name stays untrusted until three checks agree: a same-bar Volume-price analysis structure, an Average Directional Index regime check, and a moving-average location filter.

The archive measured how often a few named setups reversed or continued in a bull-market sample. Those figures describe the historical workflow. They do not turn a name into a standing claim.

What the archive specified

A two-candle above-the-stomach setup is defined only after a short-term downtrend. A black candle is followed by a white candle whose open and close sit at or above the midpoint of the first candle body. In the supplied bull-market sample, that configuration behaved as a bullish reversal 66 percent of the time.

A bearish doji star is specified as a tall white candle in an uptrend followed by a doji whose body sits above the prior body. Unusually long doji shadows are excluded. Despite its bearish name, the bearish doji star continued higher 69 percent of the time in the bull-market tests, often taking about three days to close above the pattern high.

The bearish engulfing pattern requires the second body to overlap the first body and does not require shadow engulfment. It posted one of the highest reversal rates in the study, at 79 percent in a bull market.

Color, breakouts, and delay

Candle color is defined only by whether that bar closes above or below its own open, not by whether price closed higher or lower than the previous session.

The study defined an upward breakout as a close above the top of the candle pattern and a downward breakout as a close below its bottom, on the premise that a reversal should appear promptly rather than after a delayed trend change.

Even when a doji closes at an extreme of its own range, an immediate next-day breakout is not guaranteed. Both gravestone and dragonfly dojis averaged about three days before a close beyond the pattern extreme.

Three checks before a hypothesis stands

Volume-price analysis is the same-bar structure check. Editorial use is to confirm that the open, close, midpoint, overlap, or doji location actually matches the named setup on that bar, not that the name sounds bullish or bearish.

The Average Directional Index is the regime check. Editorial use is to ask whether the surrounding directional condition is organized enough for a prompt reversal or continuation reading to be meaningful.

A moving average is the location filter. Editorial use is to ask where the pattern sits relative to that average before any reversal or continuation hypothesis is allowed to stand.

If any of the three checks fails, the name remains a label and the hypothesis does not stand.