Doji Candlestick Forex Trading Strategy


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

Doji candlestick formation is when traders are not decisive at the moment. This happens when the price has reached a low or high. This happens usually after the price has reached lows or highs. This strategy is good for 4 hours, daily and all currency pairs.

Forex indicators used:

  • Doji
  • MACD (12.26.9)
  • 25 EMA Channel (25 EMA high and 25 EMA lowest).

How do you trade with Doji Candlestick Forex Trading Strategy.

You need to know two patterns about doji: high and close.

1.) 1.) Low close doji

Bullish momentum means that the closing low of the doji's low is lower than the closing high. Then, a short position is possible.

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Doji is often seen as market is overbought. This is a sign that buyers are not deciding to maintain an upward trend. This is a sign of a blow-off top formation.

Trading Rules:

  • If the market is against the pivot point resistance target number, sell on the close or at the next time period’s open.
  • The highest point at which the stop loss is placed must be above the initial doji candle's high. You should place stop-close-only stops at the beginning of trades. This means that you cannot exit the trade until the market closes above the doji's peak.

Exit Position

  • Wait until the first candle is lit. The previous candle will have a higher closing height than the current candle.
  • A filter that confirms the signal can be used, such as a MACD-pattern.
  • Although you initially set a stop-close only, it was not for intraday trading. Most platforms don't have this feature for day trading.
  • If the market is in your favor, you can place a stop loss above the doji high. Two-thirds can be taken out of a position when you notice a trend losing momentum.

Doji Candlestick Forex Trading Strategy

2.) High close doji (HCD)

  • It is necessary for change to occur and it must be done in a market that identifies higher closing highs than the pivot point support level.
  • This pattern is known as high close doji (HCD). This pattern must fall in a certain area. It will filter out false signals.

Doji is when the market has reached a saturation point after a long trend. This means that sellers are unsure if they should sell. Prices are also close to a pivot point support level.

Trading Rules:

  • If the market is against a pivot point support target number, buy on the close.
  • Stops should be placed below the lowest point of the doji. The stop should initially be placed as a stop-close only.
    This means that you cannot exit the trade until the market closes below the low.
  • You can sell or exit the trade at the close of the candle or at the next open if the closing low is lower than the 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.

Also, don't forget to check our candlestick patterns cheat sheet.

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