Doji Models
Doji are one of the most powerful candlestick signals, they are also called Japanese candlesticks. And if you don’t use them yet, you should start working with them as soon as possible. Read our tips to help you make decent money using Japanese candlesticks.
There are several types of Doji – Star, Long-legged Doji, Doji four prices, Dragonfly, Tombstone, Rickshaw:
“Star” – looks like a small cross, these are short shadows, while the opening and closing prices of the candlestick coincide. By itself, this candle is not a signal.
“Doji of four prices” has the same opening and closing prices, so it looks like a dash on the chart.
“Long-legged Doji” refers to reversal patterns. But its appearance should be taken as a signal if it is formed at the top of an uptrend. The candle is characterized by the presence of long shadows – legs.
“Rickshaw” – the same Long-legged Doji, but with equal shadows in length; should be considered as a “yellow traffic light”, after which a change in trend may occur.
The ” Tombstone” model is characterized by the location of the body at the minimum of the candle, that is, it is a candle with one shadow. Its appearance at the top of an uptrend foreshadows a subsequent downtrend.
“Dragonfly” is its opposite; Arising at the low of the trend, it indicates its change.
Doji Signals for Binary Options
Candlesticks are most likely one of the best methods of showing the direction of trends in binary options, and the most popular candlesticks are doji. There are several types of doji, but they all share common characteristics.
Doji’s Body
Firstly, these are candlesticks with a slightly visible or even invisible body, that is, the opening and closing prices of trading sessions, which practically do not differ from each other. Doji also have clearly defined shadow positions.
It is these features, combined, that allow you to understand the market deeply enough to determine the time of balance and extreme positions. As for the signals, they are quite accurate during transition periods, if you interpret them correctly. Like all signals, doji candlesticks can appear at any time, but not just for no reason.
All they signal is the equilibrium of today’s trading; If buyers and sellers are in equilibrium, the price will remain stable during the session. Other factors make doji really important, and these factors are volume, size, position relative to the technical price level.
Really important doji signals are generated less frequently than most candlestick signals, but they are also more reliable for trading. Here’s what to look out for.
Doji Size
First, the size of the doji. If the signal is relatively small, and has short lower and upper shadows, then, most likely, it is an ordinary rotating candlestick, a representative of calm in the market, without a specific direction. If the doji shadow covers a spectrum that significantly exceeds the usual size, then the signal strength increases, and the signal strength decreases if the doji size decreases. Candlesticks with very large shadows are called long-legged doji, they are the strongest of the doji signals.
Location of Doji
Secondly, you should consider where the doji signals appear; whether they appear on a support line or resistance, or at an uncertain location, between two support/resistance target points. If the signal does not appear near the support/resistance line, then it is much weaker than the one observed near the line.
In fact, if the shadow, lower or upper, crosses one of these lines and closes under/above it, then the signal is really very strong. One type of signal that appears on a support line is called a shooting star, columns, or a hanging person. The signal that appears on the support can be a tipping signal.
There are many candlesticks that fall under the standard doji definition, but only one is considered a valid signal, this doji Longhorn signal, which appears on support and closes above the support level.
Scope of Doji
Another pointer that confirms that doji is a strong signal, and not a fake, is its volume. The higher the volume, the better the binding to the market. Relative to the example above, this means that the price has been adjusted in relation to the extreme, the extreme point, and that buyers at the extreme point have come into action.
It also means that sellers have disappeared, or those who wanted to sell have left the market and cleared the way for the bullish movement. Doji can also follow a trend or indicate a change in direction.
A doji signal that confirms support during a clear trend, if it appears at the peak of the same trend, may indicate the presence of a correction. The same is true for downtrends. If you do not take into account the trend, or other interrelated conditions, then this can affect whether the entry will be profitable or not.
Features of trading with Doji
Doji is a good idea to use in any time frame. When changing the time frame, you should take into account the size of the doji and analyze it relative to other doji and candlesticks that take place in the same time interval. The long-legged doji does not mean the same thing at all if it appears on the charts frequently, unless it is significantly longer than the average long-legged doji.
Expiration time may be your last concern. If the entry was made too close to the resistance/support level, then one or two expiration bars are most likely all you need, but in order to make sure of the signal, wait for 5 candles.
The use of Doji trading signals at the Binomo broker
We recommend trading Doji candlesticks in the reliable terminal of the Binomo broker. Among the advantages of the company: high ratings and positive reviews, a simple personal account (with transaction history, account information), a convenient terminal equipped with the necessary tools for trading, a mobile platform, training materials, and quick withdrawal of funds. You can get acquainted with real reviews about the Binomo broker, as well as ask questions to traders here.
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Conclusions about Doji signals
Undoubtedly, doji can be exceptionally excellent signals for trading binary options, they can be considered as a signal indicating the possibility of a successful entry into the market, but not as the entry into trading itself. The doji signal indicates some kind of support support, but this does not mean that the reverse movement will be guaranteed. It is better to wait for at least the next candle and make an entry near the support.
Tagged with: 60 Seconds Option Strategy • Binary Options Strategy
