Doji Candlestick Forex Trading Strategy

You can now download the Doji Candlestick Forex Trading Strategy for free on AtoZ Markets indicators gallery.

Doji candlestick Forex Trading Strategy helps the traders to figure out formation indecisive at that moment. This usually happens after the price forms lows or highs. This strategy works fine on 4 hours and daily timeframe and is applicable to any currency pairs.

Forex Indicators used:

  • Doji
  • MACD (12,26,9)
  • 25 EMA Channel (25 EMA High and 25 EMA low).

How to trade with Doji Candlestick Forex Trading Strategy?

There are 2 patterns you have to learn about doji, it’s high and close doji.

1.) Low close doji (LCD)

Bullish momentum is losing when a lower closing low below the doji’s low formed. A short position can then be considered.

Doji usually appears market is overbought. This indicates that buyers are indecisive to continue an upward trend.
Observe a candle that forms 2 tall white candles or harami doji cross and watch for increased volume. as this also confirms a blow-off-top formation.

Trading Rules:

  • Sell on the close or the next time period’s open once a new closing low is made from the previous time period’s doji’s low, especially when the market is against the key pivot point resistance target number.
  • Stop loss must be placed above the highest high point of the initial doji candle. Stops should be initially placed as a stop-close-only, meaning you do not exit the trade unless the market closes back above the doji’s high.

Exit Position:

  • Wait when the first candle opens and the previous candle makes a higher closing high than the previous candle.
  • You can use a filter confirming the signal, such as a MACD pattern
  • You initially placed a stop-close-only but for an intraday time period, this would have been a mental stop-close-only because most platforms do not have that feature for day trading.
  • Stop loss can also be placed above the doji high when the market moves in your favor. You can measure out two-thirds of a position at the first sign you see the trend lose momentum to exit a position.

Doji Candlestick Forex Trading Strategy

2.) High close doji (HCD)

  • Change must happen and takes place in a market to identify higher closing high above dog’s high at the pivot point support level.
  • This pattern is called high close doji (HCD) method. There is a specific area where this pattern needs to fall, it will filter out false signals.

Doji appears when the market is oversold after an extended trend. It means sellers are now indecisive on whether they should continue selling. In addition, prices are near a projected pivot point support target level.

Trading Rules:

  • Buy on the close or on the next open after a new closing high is made from the previous doji candle high,
    especially when the market is against a key pivot point support target number.
  • Place stops below the lowest low point of the doji. Stops should be initially placed as a stop-close-only,
    meaning you do not exit the trade unless the market closes back below the doji’s low.
  • Sell or exit the trade on the close or on the next open of a candle that makes a lower closing low near a key pivot point resistance number.

How to download and install an indicator?

In order to install the indicator on your MT4 platform, you need to follow these steps:

  1. Click on “Download Indicator” button located at the bottom of the post.
  2. Save the file to your computer.
  3. Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
  4. Restart your Metatrader platform.
  5. Navigate to “Indicators.”
  6. And select “Doji Candlestick Forex Trading Strategy” template to apply it on the chart.


Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.

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