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Technical Analysis Candlestick charts Part 3
To Doji or Not?
Figure 6.13: A doji after an up move and a closing below the previous closing is a strong indication for a price reversal.
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A strong indication of a price reversal is a doji after a price move up and with a closing price below the previous closing price. (figure 6.13).
Figure 6.14: A doji after an up price move and a closing above the previous closing needs confirmation for a price reversal.
A doji after a price move up and with a closing price above the previous closing price needs confirmation for a price reversal. Figure 6.14 shows an example without confirmation; the price continues the uptrend.
Figure 6.15: Example with confirmation resulting in a price reversal.
Figure 6.15 shows an example with confirmation resulting in a price reversal.
Figure 6.16: A doji or any other reversal pattern followed by a window is a reliable reversal signal.
A doji or any other candle reversal pattern followed by a candle with a window is a reliable reversal signal (figure 6.16).
Figure 6.17: Extra pressure on the market with more doji’s appearing together
There is extra pressure on the market when more doji’s appear together (figure 6.17).
Figure 6.18: A doji within a downtrend has less value than a doji in an uptrend.
A doji within a downtrend (figure 6.18) has much less value than a doji in an uptrend.
Figure 6.19: A doji in a downtrend always needs confirmation as a reversal signal.
A doji in a downtrend always needs confirmation for a reversal signal (figure 6.19).
Figure 6.20: A doji within a flat neutral price zone has no meaning.
A doji within a flat, neutral price zone has no meaning (figure 6.20).
Figure 6.21: A doji or any other candle pattern confirms existing support or resistance.
A doji or any other candle pattern confirms existing support or resistance (figure 6.21).
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