Quantitative study of candlestick pattern & identifying candlestick patterns using deep learning for the Indian stock market

Abstract

The stock market is an integral aspect of any country’s economic infrastructure. Analyzing and attempting to play the markets to maximize profits is an endeavor a large fraction of the population aspires to. Candlestick patterns are the backbone of Technical Analysis, used for trading in the stock market. There are a number of candlestick patterns in the market, each with its own benefits and downsides. Due to this, the task that befalls the hands of analysts is deciding which patterns provide the most effective gauge of the current market situation. Due to the large level of noise and widely recognized semi-strong form of market efficiency, analyzing and forecasting the stock market is infamously difficult. For traders that use Technical Analysis to trade, it's critical to be able to recognize candlestick patterns quickly. We will be attempting to determine their respective effectiveness with respect to the Indian Stock Market via exploratory analysis conducted on real-world market data. Also, we'll use candlestick charts to train neural networks and subsequently find patterns. Deep Learning will be used to recognize candlestick patterns in large-cap Indian equities.