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How to Trade Doji Candle | Single Candlestick Pattern
Learn to use dojis for successful trades â
Upsurge Club
December 20, 2023
Hey there đđŒ
The biggest profits come when you can ride most of a stockâs trend. Although waiting for confirmation before entering a trade is ideal, wouldnât it be easier if there was a way to predict these trends before they start?
Well, many indicators and candlestick patterns can help you do that. One such candlestick pattern is the doji.
The Doji Candlestick Pattern
A doji is a candlestick pattern whose opening and closing prices are virtually equal or have very little difference. These candlesticks have a small or nearly non-existent body and longer wicks, looking like a crosshair.
A doji candle signals indecision about future prices, potentially a pause in the ongoing trend or a trend reversal.
Although called âneutral indicatorsâ, dojis can convey important information about the marketâs sentiment.
How to Trade a Doji
Depending on its placement on the chart, you can strategically use a doji for successful trades. Let's see how:
Doji after a Downtrend:1) The doji should form after a significant downtrend 2) You can enter if the candle after the doji breaches the high of the doji, and is preferably bullish 3) Exit when a bearish candlestick pattern is formed or when a long-term resistance is hit 4) A stop loss can be placed at the low of the doji  Doji formed after a downtrend, triggering a rally. | Doji after an Uptrend:1) The doji should form after a significant uptrend 2) You can enter if the candle after the doji breaches the low of the doji, and is preferably bearish 3) Exit when a bullish candlestick pattern is formed or when long-term support is hit 4) A stop loss can be placed at the high of the doji  Doji formed after an uptrend, triggering a downtrend. |
Dojis can be very useful in an exit strategy as well. When a doji is formed after an uptrend that you participated in, you can exit once the dojiâs low is breached. Conversely, when doji is formed after a downtrend, you can exit the short trade once its high is breached.
Note that dojis indicate indecision and shouldnât be considered a sign of reversal always. Itâs prudent to wait for a non-doji candle to confirm a new trend before entering a trade.
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Happy learning,
Upsurge.club
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