Published Paper Details:

The article investigates how much the investors are aware, how well they comprehend and what their perception is of the candlestick chart patterns as a technical analysis tool. The data which was gathered from 268 investors utilizing a convenience sampling method disclosed that the most powerful factors moulding the investors' perception and application of the candlestick analysis in stock trading are knowledge and the interpretive understanding. The respondents who had a better understanding of the candlestick patterns were more confident and accurate in their interpretation, and therefore they made informed investment decisions. It is true that the educational background and exposure to stock trading enhance one's analytical ability but their influence is felt only when it is backed by a solid interpretive foundation. Interestingly, the study shows that there is a negative correlation between the previous exposure and the variety of candlestick types that one knows, which means that seasoned traders usually stick to the patterns that they are already acquainted with and, thus, their adaptability to new analytical insights is limited. Besides, across the different types of investors, the knowledge factor is the only one that significantly differentiates in terms of the trading style and strategy. The study insists that the simple experience or exposure does not suffice but rather one has to develop a deep conceptual and interpretive understanding of candlestick patterns for effective technical analysis, improved decision-making in stock trading and especially so in the case of Nifty Fifty stocks.