Doji Candlestick Binary Options Winning Strategies

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The Doji Candlestick Formation

What is A Doji?

  • Doji form when the open and close of a candlestick are equal, or very close to equal.
  • Considered a neutral formation suggesting indecision between buyers and sellers–bullish or bearish bias depends on previous price swing, or trend.
  • Length of upper and lower shadows (wicks and tails) may vary giving the appearance of a plus sign, cross, or inverted cross.

Why are Doji important?

  • Completed doji may help to either confirm, or negate, a potential significant high or low has occurred.
  • May act as a leading indicator suggesting a short-term price swing/trend reversal may be in progress.
  • Doji may also help confirm, or strengthen, other reversal indicators especially when found at support or resistance, after long trend or wide-ranging candlestick.
    • Long-legged doji represent a more significant amount of indecision as neither buyers nor sellers take control.
    • Gravestone doji indicate that buyers initially pushed prices higher, but by the end of the session sellers take control driving prices back down to the session low.
    • Dragonfly doji indicate that sellers initially drove prices higher, but by the end of the session buyers take control driving prices back up to the session high.
  • Failed doji suggest a continuation move may occur.

Daily EUR/USD

4hr USD/CHF

The following example illustrates what that single 4hr doji candlestick looks like when broken down to 5 min sessions, or periods… (Note: it would be great to better visually display the zoom from this 4hr USD/CHF candlestick to the below 5 min breakdown, and also to do a scroll animation (from left to write) showing how the candles developed)

So how do I use doji’s to place trades?

Doji are neutral indicators that simply represent a “tie” in the never-ending battle between buyers (bulls) and sellers (bears). On their own, doji are not much help in making sound, high probability trading decisions— as is the case with any single indicator. This is mainly due to the fact that even if a doji does signal the beginning of a price swing reversal, it will not give any indication as to how far the reversal my go or how long it may last.

High probability trades are identified through a convergence of trading signals that help identify and confirm both entries and exits based on two key components: (1) trend (2) support & resistance. Without having identified those two components in advance a doji, as is the case with any other solo indicator, is nothing more than a coin-toss in terms of determining probabilities.

But when used in conjunction with other forms of analysis, doji can be helpful in confirming or negating significant high/lows, which in turn helps a trader determine whether a short-term trend is likely to reverse, or continue. In other words, a single doji is a just a small piece of the puzzle in helping a trader determine a higher probability point at which to either or enter, and/or exit a position.

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. (enter the market shot with a sell order, or enter the market long with a buy order), and which to exit.

The most basic ways to determine support & resistance is based off previously established highs and lows…

Another way to identify more significant levels of support and resistance in terms of trend reversals is based off previously established significant highs (peaks) and lows (valleys). These peaks and valleys help a trader identify the beginning and ending points of price swings, or trends.

Based off these significant highs and lows, a widely recognized form of technical analysis referred to as Fibonacci retracements may be used to identify support or resistance. These Fibonacci retracement levels represent percentage corrections of previously established price swings, or trends. The most common Fibonacci retracement levels are 38.2%, 50%, 61.8%, and 78.6% of the previous swing, or trend.

In the above example, we see the completed doji (point C) has also occurred at the 78.6% Fibonacci retracement level of resistance based on the previous downtrend. In other words, the swing from the low up to the completed doji (B-to-C) is approximately 78.6% of the previous downtrend (A-to-B). In this case, a trader may interpret this doji as confirmation of the Fibonacci resistance and in turn anticipate an forthcoming reversal, or downswing. If the doji fails (a new high is make above the high of the doji), then this would negate the reversal and suggest a potential continuation.

Based on this basic idea, a trader may then decide to enter the market short (place a sell order) with a stop (or sometimes referred to as a stop-loss) placed above the high of the doji and the Fibonacci level of resistance. Since this stop-loss order is meant to close-out a sell entry order, then a stop buy order must be place.

What is very important to remember is that the highs, lows, opens and closes seen on a price chart reflect the bid prices of that particular market— in other words, the price at which a trader may sell. When placing a buy order it is extremely important to account for the spread for that particular market because the buy (ask) price is always slightly higher than the sell (bid) price. In this example, let’s assume the spread on the USD/CHF at the time of this trade is 4 pips.

In order to close the short, or sell, entry order the trader must place a buy order to either control the amount the trader is willing to lose with a stop-loss, or where to take profit with a limit order (or multiple limit orders if multiple profits targets are established). The size of each stop or limit order is based on the size of the entry order, or what is referred to as the traders open position. Although it is not uncommon for traders to have multiple profit targets, it is generally good practice to have one stop order that matches the size of the total open position thus taking the trader completely out of that position.

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At this point only half, if that, of the battle is over. What about the profit targets? Well, much like our entries and stops, our limit also should typically be based on support or resistance. This gives a trader a logical point at which to exit the market. In this example, we will use the same Fibonacci analysis based on the rally (swing, or trend) prior to our completed doji to calculate potential levels of support where the projected reversal may stop and change directions. It’s important to remember that levels of support and resistance act a “zones” where prices may fall just a bit short, or just pierce, the levels. In other words, traders may want to allow for a “cushion” just above or below Fibonacci levels. Since in this example, we’re anticipating the market to move down we may want to set profit targets just above the Fibonacci levels in case the market doesn’t quite reach the actual line we see on the chart. (when setting stops, traders will typically allow for a cushion just beyond a levels of support or resistance allowing a bit of room in which the market may pierce that exact level)

No one no matter how experienced a trader, no one knows with any degree of certainty what the market will do next or how far the market will go. This explains why some traders may choose to have multiple profit targets. One age old trading mantra says, “cut your losses quickly, and let your profits run.” Although this, for good reason, is an excellent piece of advice it is often misinterpreted by both new and veteran traders alike. A trader must “let profits run” only to logical profit objects, which generally reflect levels of support and resistance. This is where trend analysis, plays a significant role in helping to determine which profit targets, or how many, a specific trade calls for.

The mistake for most traders is not wanting to “get out too early” and as a consequence greed oftentimes takes over. 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.

For now, let’s just keep it simple and see what this trade setup looks like using the same USD/CHF example. We will assume the most conservative profit target (set just above the 38.2% Fibonacci retracement level adding 4 pips for the spread).

Now that we have determined out exits BEFORE entering into the market, we will be able to perform the 2 absolutely essential/crucial components of proper risk/money management, and trading in general. Depending on exactly where we enter the market we are able to determine 1) the risk vs. reward ratio, and 2) the amount of risk on the trade. The risk vs. reward ratio in many cases will be the determining factor based on a traders’ winning percentage. The risk itself will help determine the appropriate size trade to place. Let’s assume we entered this short trade just after the doji completed, the sop-loss order was placed 1 pip above the high of the completed doji adding 4 pips for the spread, and the limit order was placed 5 pips above the first profit target, or T1 (just above 38.2% retracement of B-to-C, plus the 4 pip spread).

Total risk: 35 pips (difference between entry and stop)

Total reward: 75 pips (difference between entry and profit target)

Risk vs. Reward ratio: 1 vs. 2.14 (reward divided by risk)

Assuming the risk vs. reward ratio is acceptable, you may then determine the appropriate size trade to place based on your percentage risk per trade. As a general rule of thumb most traders do not risk more than 1-3% of their total trading capital (1-3% account balance).

Total risk: 35 pips

Pip value: $9.60 USD (approximate pip value at time of this particular

Account balance: $10,000 USD

Max risk per trade: 2% or $200 USD

In this scenario, the trader has two options….

  1. Pass on the trade since 35 pips of risk x $9.60 /pip = $336 total risk on trade (over pre-determined $200 max risk per trade)
  2. Adjust lot size to fit within max risk per trade allotment. This would require mini lots….5 mini lots ($4.80 per pip) x 35 pips of risk = $168.00 total risk on trade (within pre-determined max risk per trade)

4hr USD/CHF

This particular trade resulted in a win for a total of $360 USD. Obviously, this is just one example and in no way suggests or constitutes a standalone trading strategy or methodology. However, the real point here is that profitable trading is not about complex indicators or systems. Above all is good risk and money management. If a trader was disciplined enough to only take trades that offer maximum risk to reward ratio, then it’s easy to see that profitable trading is not about being right, it’s about discipline and ability to control your emotions.

Extra rambling from excreted from different point in the above

This example demonstrated an opportunity with just over a 1:2 risk vs. reward ratio. If that ratio was one of a traders minimum criteria for placing a trade, then that trader would only need to maintain a 33% winning ratio to break even in terms of profitability. Even when losing, or being “wrong”, happens more frequently than winning, or being “right,” a trader can be profitable. Understanding this in and of itself gives you and edge or advantage against a majority of traders out there. Let go of you ego, play the numbers game, and you have a good chance of reaching your goals.

The market may turn at these at these predetermined logical profit targets, or in many cases move way beyond them. A trader will never know this information in advance. What tends to happen in the instances where the market continues to move in a profitable direction after the trader has already closed the trade for profit, the “shoulda, coulda, woulda’s” start to take hole, and greed starts to blind the trader to the truth. The truth is, you made a PROFIT!. But when the market continues to move in a profitable direction after the trade has been closed, most traders will no longer look at that trade and think, “who cares! I made money on the trade, and I’m happy with that.” Most traders forget about the profit they’ve taken and start to think, “Damn! I got out too early! Look at how much I could have made, or should be making.” This leads to emotions. Emotions lead to irrational, illogical decisions—especially when money is in the equation. Over time, making trading decisions based on emotion leads to trading suicide (i.e. a zero balance).

So all a trader can do is decide what is logical, understand why those levels are logical, and never look back. One of the worst and most destructive habits of nearly all traders is to look back after a trade has completed to “see what happened.”

Доджи Стратегия форекс Подсвечник

формирование Доджи Свечной означает, что трейдеры нерешительны в тот момент. Обычно это происходит после того, как цена формирует низкий или высокий.

Эта стратегия работает на 4 часов и дневной таймфрейм и применимо к любым валютным парам.

Форекс Индикаторы:

  • Доджи
  • MACD (12,26,9)
  • 25 EMA канала (25 EMA высокого и 25 EMA низкий).

Есть 2 модели, которые вы должны узнать о дожи, это высокие и близкие дожи.

1.) Низкая близко дожи (ЖК-дисплей)

Восходящий импульс теряет, когда ниже закрытия низко ниже минимума дожи сформировало. Короткая позиция, то можно считать.

Доджи обычно появляется рынок перекуплен. Это указывает на то, что покупатели нерешительны, чтобы продолжить тенденцию к росту.
Обратите внимание, что свечи формы 2 высокие белые свечи или Harami дожи крест и наблюдать за увеличенного объема. так как это также подтверждает, обдув-топ образование в.

Правила торговли:

  • Продать на закрыть или открыть следующий период времени, однажды новый закрытие низко сделан из дожи предыдущего периода времени в минимуме, особенно когда рынок против ключевой точки поворота целевого сопротивления числа.
  • Стоп-лосс должен быть размещен выше самой высокой точки высокой начальной дожи свечи. Остановки должны быть первоначально помещен в качестве стоп-макро только, означает, что вы не выходите из сделки, если рынок не закроется выше отметки доджи максимума.

Выход из положения:

  • Подождите, когда первая свеча открывается и предыдущая свеча делает более высокий максимум, чем закрытие предыдущей свечи.
  • Вы можете использовать фильтр, подтверждающий сигнал, такие как шаблон MACD
  • Вы изначально разместили стоп-ЗАКРЫТЬ только, но в течение периода времени внутридневной, это было бы ментальный стоп-макро только потому, что большинство платформ не имеют этой функции для дневной торговли.
  • Стоп-лосс также могут быть размещены выше максимума дожи, когда рынок движется в вашу пользу. Вы можете измерить две трети позиции при первых признаках вы видите тенденцию терять импульс, чтобы выйти из позиции.

2.) Высокая близко дожи (HCD)

  • Изменения должны произойти и происходит на рынке, чтобы определить более высокое закрытие высоко над высотой собаки на уровне опорной точки поворота.
  • Эта модель называется высокой близко дожи (HCD) метод. Существует особая область, где эта модель должна падать, он будет отфильтровывать ложные сигналы.

Доджи появляется, когда рынок находится в зоне перепроданности после продолжительного тренда. Это означает, что продавцы теперь нерешительны о том, должны ли они продолжать продавать. К тому же, цены рядом с проектируемой опорной точки поддержки целевого уровня.

Правила торговли:

  • Покупайте на закрытии или на следующий после того, как открыт новый максимум закрытия сделан из предыдущей свечи дожи высокой,
    особенно когда рынок против ключевой точки поворота поддержка целевого числа.
  • Место остановки ниже самой низкой нижней точке дожи. Остановки должны быть первоначально помещен в качестве стоп-макро только,
    означает, что вы не выходите из сделки, если рынок закрывается обратно ниже доджи минимума.
  • Продажа или выйти из сделки на закрытии или следующего открытия свечи, которая делает более низкий закрытия минимума вблизи точки поворота ключа числа сопротивления.

ИСПОЛЬЗОВАНИЕ ЕМА и MACD для фильтрации или подтверждения сигналов.


Инструкции по установке стратегии форекс

Доджи Forex Подсвечник Стратегия представляет собой сочетание Metatrader 4 (MT4) индикатор(s) и шаблон.

Суть этой стратегии форекс заключается в преобразовании накопленных исторических данных и торговые сигналы.

Доджи Forex Подсвечник Стратегия дает возможность выявить различные особенности и закономерности в динамике цен, которые не видны невооруженным глазом.

На основании этой информации, трейдеры могут предполагать дальнейшее движение цены и регулировать эту стратегию соответственно.

Рекомендуемый Форекс Metatrader 4 Торговая платформа

  • Свободно $30 Для того, чтобы начать торговать Мгновенно
  • Бонус на депозит до $5,000
  • Безлимитная Программа лояльности
  • Награды наградами Forex брокер

Как установить дожи Forex Подсвечник Стратегии?

  • Скачать дожи Форекс Свечной Strategy.zip
  • *Скопируйте mq4 и ex4 файлы в директории Metatrader / эксперты / показатели /
  • Скопируйте файл TPL (шаблон) к вашему Metatrader каталог / шаблоны /
  • Запуск или перезапустить Metatrader Client
  • Выберите Диаграмма и Временной интервал, где вы хотите проверить свою стратегию форекс
  • Щелкните правой кнопкой мыши на торговом графике и наведении на “шаблон”
  • Перемещение вправо для выбора дожи Форекс Свечной стратегии
  • Вы увидите дожи Forex Подсвечник стратегия доступна на графике

*Заметка: Не все стратегии форекс поставляются с MQ4 файлами / eX4. Некоторые шаблоны уже интегрированы с MT4 индикаторы от MetaTrader платформы.

Doji Candlestick Pattern Strategy

Among other Japanese Candlestick patterns describing the price action on different charts, Doji candle is one of the most widely-used reversal signals. Based on that, a Doji Candle Strategy was developed, allowing Forex traders to identify the potential end of the recent trend and a possible reversal of the price action shortly.

Thanks to the informative chart view, Japanese Candlesticks chart make the technical analysis much easier compared to the traditional line on the price chart. The main power of candles is that they show four parameters in one single bar – open, high, low and close (OHLC) rates. Those four figures reflect the price action inside the given period more effectively than a single number indicated in the line – close price. Thus, comparing the difference between OHLC rates, a Forex trader can easily imagine what was happening during the chosen period in terms of the eternal fight between the bulls and the bears.

Imagine a price action leading to a sharp spike of the price in the first half of the day and a U-turn action after reaching some important level. Imagine the bulls were trying to continue the recent uptrend, got stuck at some point, and the bears pushed the price back to the same level the day opened. Such a scenario suggests that a strong technical or psychological resistance level has been reached, and the recent uptrend faced a tough challenge to keep lifting the price higher.

What is a doji candlestick?

Types of Doji Candlestick Patterns

There are several types of Dojis depending on the direction of the recent trend. A candlestick chart with a long upper shadow, small or absent lower shadow and relatively small or absent body is called a Gravestone Doji Candle. It usually shows that the recent uptrend might come to an end.

Below is an example of a Gravestone Doji on some chart screenshot:

The long upper shadow is a must for the Gravestone Doji formation. It shows how strong the bears were at some point as they were not only able to withstand the buying pressure and absorb all of the buy-orders from the bulls, but also push the price lower at some point. The lack of bullish momentum forced buyers to retreat, while the sellers gained the power to close the day (or another period) near the open rate. As a result, there was no significant development of the recent uptrend.

Long Legged Doji usually has long shadows on both sides, while the body is also absent meaning that open and close rates are equal. This type of bar might point to the indecisiveness of the market players and further consolidation sideways range in the future. It looks like in the screenshot below.

Finally, Dragonfly Doji has a long downside shadow and small or absent upper shadow, and again, small or absent body. It has the same meaning as per the first type, but the direction of the previous trend is different. So it could show a bullish reversal after a bearish trend. See the chart below as an example of Dragonfly Doji.

Of course, like any other single candlestick pattern, Doji needs confirmation by further price action. In case if the upcoming bar is in the red, it might signal a deep bearish retracement if not a long-term reversal. Therefore, Doji Candlestick Pattern has to be implemented as a primary signal to pay attention to, but not a signal to act immediately. Additional technical tools and indicators can be used to confirm or deny the preliminary reversal signal. Further price action is also used in the technical analysis as pure action is the only resource to understand future market’s intentions.

How to trade with Doji candlestick pattern?

Best time frames for Doji Candles

What does a doji candlestick mean?

Context is extremely important in any Forex analysis and Doji is not an exclusion. In case if a Gravestone Doji was formed after a strong uptrend, while the pace of growth of security slowed down before that, the likelihood of a bearish reversal is high. However, if the same candlestick appeared inside a sideways range, there’s nothing to reverse, and the meaning of it will be less informative.

The key informative message that markets are trying to send when charting Dojis is that the momentum is getting exhausted. That is related to occasions when a strong trend was noticed previously. A weaker momentum suggests that counter-trend forces might reverse the price action. To confirm that suggestion, FX traders should add a momentum indicator to the price chart to double-check the preliminary information received from the Doji. For example, the Average Directional Index or True Strength Indicator might be useful to determine that.

Using a Doji Candlestick with technical indicators

Besides momentum indicators, it’s worth assessing overbought or oversold conditions before making the trading decision based on Doji Candlestick chart Pattern. Oscillators will help to do that. The relative Strength Index, Stochastic RSI or Commodity Channel Index are among the most widely-used technical indicators to check out the level of overbought or oversold conditions.

Envelope indicators such as Bollinger Bands or Keltner Channel are also useful in terms of effective analysis of Doji Forex cases. In case if a Doji closes inside the Bollinger Bands but closer to the top or bottom of the range, while the shadow crossed those lines, that could empower the likelihood of a reversal. Below are several examples of Doji Candlestick Patterns confirmed or denied by technical indicators.

Adding short positions at the end of the bullish retracement

AUD/JPY was in a long-term downtrend on the daily chart below. After a short-term bullish retracement, a Gravestone Doji was formed. The upcoming candlestick confirmed a sell-signal as 13-days Relative Strength Index remained below the threshold of 50 points, while the Average Directional Index switched the sentiment to negative. Although the overall momentum was getting weaker, according to the ADX mainline, the downtrend continued. In this case, the Doji signalled and confirmed the end of the upside correction.

If you like this strategy, you might also be interested in this Heiken Ashi Strategy

No confirmation after Doji candlestick

In the case shown on the daily chart below, technical indicators and further price action denied the trading signal came in from a Doji candlestick due to several factors. First, it does not reverse anything as there was no strong downtrend before. Second, the following candlestick was green. Third, the middle BB line was not breached by the daily close rate. Fourth, Williams %R oscillator did not cross the level of -50%.

Doji candle signal was not confirmed

EUR/GBP charted several green candles before the Gravestone Doji was formed on the daily chart below. However, the following candle did not confirm the bearish reversal as it failed to close below the previous green candle’s close. What’s more, BB %B oscillator was above the middle line, pointing to bullish conditions. Stochastic RSI had both lines heading north without a bearish cross. Therefore, the Doji candle signal was denied by technical indicators and no deal was opened.

Examples of profitable trades based on Doji Candle

Long EUR/JPY after Dragonfly Doji

Before the Dragonfly Doji appeared on the daily chart below, EUR/JPY was consolidating losses with a mostly bearish bias. Although the following candle did not close above the previous one, the long positions were opened as Commodity Channel Index went off the oversold zone, while True Strength Indicator was pointing out a positive sentiment as its lines were above the threshold. The stop-loss was set at the lowest daily price of the green bar. The profit was taken after CCI went into the overbought zone.

Two Dojis Candle in a row

USD/CAD was in a 10-day uptrend after bottoming out and two Doji Candle Patterns formed. On the next daily candle, a short position was opened as Stochastic RSI performed the bearish cross in overbought territory, while ADX shifted the surplus to negative. The stop-loss order was set 5 pips above the recent high. The profit of 27 pips was taken manually after Stochastic RSI charted an opposite crossover.

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