Testing Efficieny of the Cotton Futures Market Using Japanese Candlestick Charts

In recent years Japanese candlestick charts have come into use in this country. This study used candlestick charts in simulated trading of cotton futures from 1973 to 1990. While candlestick chartists claim that candlestick patterns can predict turns in the market, statistical tests reported in this paper indicate otherwise. Even though this study produced no conclusive evidence that candlestick patterns have predictive value in the cotton futures market, we strongly feel that further study is needed.