Doji Candlestick Pattern-Rare But Easy To Spot And Highly Profitable!
Candlestick Charting is one of the most powerful tools in the trading arsenal of any trader. Candlestick Charts apply to any market no matter what you trade-stocks, forex, futures, options, ETFs, commodities, bonds and others. With one simple glance on the chart, you can figure out the sentiment of the buyers and sellers in the market. There are many candlestick patterns that are used as trading signals. Some are simple while others are complex. Doji Candlestick Pattern is a simple pattern that is very easy to spot. It has no body. It is formed when the opening and the closing prices are the same. So, this pattern is all wicks with no stick. It literally looks like a Cross on the chart. So you can easily spot it. But it is very rare as the security opening and closing prices are seldom equal! Doji has some variations. We will discuss these variations in this article!
So for a Doji to be truly formed on a trading day, throughtout the trading day heavy buying or selling may take place but at the end of the day, the price should be where it had been at the start. In other words, the opening and the closing prices should be the same for a Doji to be formed.
What’s so special about the Doji pattern? The special thing about this pattern is that it is a signal that the market is about to turn. Doji is an indication that the battle between the bulls and the bear has been equal. The day ended with a draw between the bulls and bears but the next day one side is going to overpower the other.
Now, a Dragonfly Doji is a unique variation to the Doji Candlestick Pattern. It is formed when the opening, the closing and the high prices are all equal. Something quite rare and unique. So how is a Dragonfly Doji is formed? It is formed when the security price opens. It is traded down during the early part of the day. At some point in the trading day, the price action starts to recover and climb. It eventually closes at the high which happens to equal the open of the day. Something unique!
When a Dragonfly Doji is formed, bears initially decide to rule the market. But at some point the bulls step in and decide to buy again. When the bulls step in, they start pushing the price up. As the bulls dominate the trading day, the security price ends up right where it had started.
The low on this pattern can be taken as the support level because this was the level at which the bears entered the market and started buying. Dragonfly Doji is considered to be a bullish candlestick pattern.
The second important variation to the Doji is the Bearish Gravestone Doji. This pattern is formed when the open and close of the day is equal to the low of the day. This is something opposite to the Dragonfly Doji where the open, the close and the high were equal. When a Bearish Gravestone Doji Pattern is formed, it is a signal that a prolonged downtrend is about to start in the market.
A Doji pattern is very easy to spot on the candlestick chart as there is no body just the wick. Open close and either low or high all three are equal and the candle looks more like a cross. When you spot the Doji, get ready for a trend change in the price action.
Mr. Ahmad Hassam has done Masters from Harvard University. Master these Candlestick Patterns with this 82 page PDF FREE Candlestick Guide! Get this 49 page Quantum Swing Trading Report plus the shocking Profit Button Report that applies no matter what you trade-stocks, forex, futures or options FREE!
Related Blogs
- Dragonfly & Gravestone Doji Candlestick Patterns- A Rare But Highly Profitable Patterns!
- Doji Candlestick Pattern-Something Unique And Highly Profitable! | Stocks Advices
- Ganging up on the market! January 22, 2010 | Blogza.in.th
- Stock Pick 101 – Line Chart, Bar Chart and Candlestick Chart | PickUpLinesForYou.com/Blog
- Information about Candlestick Chart Patterns | Tobasoft
- Interpreting Candlestick Chart Patterns «Lackey's Fine Furniture
- Some Information To Know About Technical Analysis
- Candlestick Guide | Forex Stock Market
- Technical Analysis – Reading FOREX Charts | forex-indicator.org
- » Information about Candlestick Chart Patterns Carbon Geek
- Profitable Candlestick Patterns-The Bullish White Marubozu-Bullish White Long Candlestick!
- Candlestick Patterns for Trading 2 | Best Trading Videos
- Candlestick Patterns That Reveal Trend Changes | Free Forex Trading – Online Training and Forex Market Tips
- Doji Candlestick Pattern-Rare But Easy To Spot And Highly Profitable!
- The Tweezer Top Candlestick Pattern | rapidforex.com
- Dragonfly Doji Candlestick Pattern Is Highly Profitable! | Proinvests.com
- Japanese Candlestick Patterns – Doji & Spinning Tops | rapidforex.com
- » Dragonfly Doji Candlestick Pattern Is Highly Profitable! Articles – Finance Link Central
- Global Forex Capital Markets – GFCM » Blog Archive » Types of Doji
- More on candlesticks: trading the doji | Free Forex For All
Mail this postOther articles you might like;
- Learn More About the Art of Fine Gold Jewelry Designing
- Are Humans the Cause of Global Warming?
- The History of Fine Gold Jewelry Design
- A Look at the Natural Causes of Global Warming
- Finding Simple Back Acne Cure Options
Leave a Reply