Candlestick Pattern Dictionary

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Doji Candlestick Pattern

Let’s take a look at how doji can be used with other basic technical indicators to make a high probability trading decision. The first things we want to do is determine support & resistance, and trend. The idea is to sell near resistance, and buy near support. Trend helps tell a trader which direction to enter, and which to exit. A long lower wick, signalling a bear run that reversed by the session’s end, and nothing on the other side. A gravestone doji on a downtrend can be a reversal signal, whereas it might point to a continuation of bullish price action.

This almost always leads to giving those profits back, and in many cases turning a winning trade into a losing trade. Multiple profit targets tend to lead to more complicated exit strategies in which stop management becomes essential. One key aspect of successful trading that will help to determine the quality and probability of a trade is the risk vs. reward ratio. In my opinion, this is without question the single most important factor of a high quality trade. Since this stop-loss order is meant to close-out a sell entry order, then a stop buy order must be place.

Example of How to Use the Dragonfly Doji

A gravestone doji occurs when the low, open, and close prices are the same, and the candle has a long upper shadow. The gravestone looks like an upside-down «T.» The implications for the gravestone are the same as the dragonfly.

Doji Candlestick Pattern

Hammer candlesticks form when a security moves significantly lower after the open, but rallies to close well above the intraday low. If this candlestick forms during a decline, then it is called a Hammer. If you want to read more about candlestick patterns, we recommend you read the articles on The Robust Trader.

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Harness past market data to forecast price direction and anticipate market moves. Trade up today – join thousands of traders who choose a mobile-first broker. Using doji in trend following – In an uptrend, an asset will tend to retreat slightly. During this pullback, a doji can tell you Doji Candlestick Pattern when the uptrend is set to continue. If the two prices are not the same within a few ticks, this can be said to be a Doji. Doji and spinning tops show that buying and selling pressures are essentially equal, but there are differences between the two andhow technical analysts read them.