- This topic has 267 replies, 266 voices, and was last updated 2 years, 7 months ago by
.
-
Posts
-
The Doji is a commonly found pattern in a candlestick chart,it is characterized by being small in length—i.e,a small trading range, with an opening and closing price that are virtually equal.
Doji is a key trend reversal indicator, if it appears at the top of a trend, in an overbought area, we can create short position and if is is seen at the bottom of an extended downtrend we can create long position.
Note* – After the Doji is formed we need to wait to get the confirmation of the reversal trend before taking positions.
After a downward or a upward movement there is a pause in the trend which is neutral signified by a doji which indicates a trend reversal. When doji appears with a significant volume the reward can be 1.5 x more than the risk.
After a downward or a upward movement there is a pause in the trend which is neutral signified by a doji which indicates a trend reversal. When doji appears with a significant volume the reward can be 1.5 x more than the risk.
A DOJI candlestick forms when a security’s open and close are virtually equal for the given time period and generally signals a reversal pattern for technical analysts. A Doji is used to illustrate market indecision and serves as a signal for a reversal in a market that is either upward or downward trending. A Doji does not occur frequently and is therefore not reliable or a trustworthy indicator on its own. It must be used with other chart pattern analysis techniques in order for a trader to make an informed decision. It does not always symbolize an extended trend reversal. The direction of the prominent trend may change; however, the longevity of the new direction cannot be guaranteed. Because candlesticks do not necessarily make a provision for price targets, making use of a Doji to produce an informed trade will not guarantee any estimation on the possible gains that can be earned in the trade. The trade must make use of other technical analysis techniques to determine entry and exit points for trades.
- You must be logged in to reply to this topic.
