recognize the Doji candlestick pattern

There are certain Candlestick patterns that are vital to your trading. They are vital because they identify potential trend reversals. Why do I need to identify these candlestick patterns? Because they can earn money! Failure to spot these lamp models can lead to costly trading errors.

Ask any trader who used candlesticks to trade, that beacon of all models is most important to recognize. He or she will say without hesitation Doji. The appearance of a Doji Candlestick Pattern is often a sign of the beginning of a small or medium trend.

Failure to recognize the Doji candlestick pattern risk buying at the top or stay too late in the trend. Regardless, it should immediately be able to recognize these four Doji Candlestick Patterns, the common Doji, long legged Doji, Dragonfly Doji and gravestone Doji.

One thing common among these four templates Doji is the fact that prices opened and closed at the same level. If prices open and close very close formation of very small body, even then you can still recognize as Doji pattern.

After a long uptrend, the appearance of a Doji candlestick pattern is a signal that the trend is on track to reach its top. The uptrend, the bulls won the previous battle as prices moved higher. The appearance of a Doji signals that the bulls or bears win. This means that the balance of the market between sellers and buyers or tug of war that neither the bulls nor bears are winning.

Similar is the case in a long downtrend. Bears were winning the battles, but the emergence of Doji means bulls found the courage to beat the tide may soon turn in favor of the bulls in the market.

General Doji pattern is indecision in the market. Long legged Doji is far more dramatic pattern. This means that prices moved higher on the day after sales began leaving a long upper shadow candle. In close before the middle of the candle shows many weaknesses.

When long-legged Doji pattern is formed out of the Upper Bollinger Band, after a long uptrend, that means possible trend reversal. If this is confirmed by the sell signal on stochastics, it is a sure warning that the reversal is about to happen soon.

A gravestone Doji indicates that higher prices are collected daily, but buying may not be sustainable in the market and prices are back and closed at the open. A Dragonfly Doji is quite contrary to the gravestone Doji. Prices then open the secondary market sales began later buyers dared to start buying and prices returned to close in the open.

Now, you need to assess the appearance of a Doji Doji carefully noting happens when the candlestick chart. The appearance of a Doji in the early stages of this trend could mean anything. Similarly, if you find a Doji appears in the middle of the Bollinger Band, it may mean a break, a reversal of this trend.