Because, Doji candlesticks play a significant role whether you will keep or close your existing position or enter to the market. The preceding candle is needed to notice well also.
In other word, Doji is a candlestick chart pattern formation which alone indicates the indecision, neural situation in the market.
After enough study and experience to recognize doji well, you will be able to catch the idea.
Because there are 4 types of doji and some of them indicate in a direction of possibility.
On the other hand some of these indicates neutral situation for which you need to wait until you are getting a confirmation to take a decision.
When the opening price and the closing price is equal, a doji candle forms.
The price may goes up first and then goes down or in contrary, The price may goes down first and then goes up but it will be closed at the same price where the day or trading session was opened.
It indicates that neither buyers or sellers were able to take the control of the market and consequently the result was a draw.
The word 'Doji; can be referred as plural or singular both.
Notice that a doji does not means that there is a reversal. It indicates only the indecision between bulls and bears.
To confirm for a reversal, you need to use other tools combining with this candlestick chart patterns. Some say that it is a reversal pattern.
But I am strongly telling you just don't depend on a doji formation to be ensured that there is a reversal. Find out others probability to make your trade a high probability trade.
However, Doji candle has much importance. Because, It is common candlestick formation which usually seen in the chart.
And you need to know well how to play in this indecision situation.
Types of Doji
- Neutral
- Long-legged
- Dragonfly
- Gravestone
A long-legged doji is also important in price action trading as well as other trading system. Others doji formations are also important to the same point.
Basically understanding candlestick chart patterns is the main theme to understand your chart. The chart tells more about it by difference patterns.You should learn how to trade skillfully with the help of your chart.
Key-point:
- A doji or spinning tops(another types of candlestick formation often combined with Doji) are commonly referred indecision situation in the market.
- You should notice the place where these are forming.
- At support and resistance area or trendline, Fibonacci retracement Doji's play more importance to take care these ideally.
| 01 | How to Read A Candlestick Chart |
| 02 | Bearish Engulfing |
| 03 | Bullish Engulfing |
| 04 | Doji |
| 05 | Dragonfly Doji & Gravestone Doji |
| 06 | Piercing Pattern |
| 07 | Morning star |
| 08 | Dark cloud cover |
| 09 | Hammer |
| 10 | Hanging Man |
| 11 | Harami |
| 12 | Inverted Hammer |
| 13 | Evening star |
| 14 | Shooting star |
| 15 | Tweezers Top |
| 16 | Tweezers Bottom |
| 17 | Windows |
| 16 | The Last Discussion on Japanese Candlestick Chart |
No comments :
Post a Comment