Doji: at the tops, after a long white candle, Rickshaw Man, Gravestone Doji, three stars

The Doji signal is a candle formed when the open and the close occur at the same level or very close to the same level (Figure 1). The appearance of a Doji is one of the most revealing reversal signals. Doji signals are important only on the markets where they are met rarely. That’s why it isn’t recommended to look for doji signals on the charts with the period less than 15 minutes, as on such chart you may find a great number of doji signals.

A stronger signal has the appearance of a doji on the top. But at the bottom of the market very often «magic» power of the doji to reverse the market is lost.

The appearance of a doji after a large white candle is a very serious reason for the bulls to take notice.

The appearance of the «Rickshaw Man» or «Gravestone Doji» patterns after the uptrend almost doesn’t give the uptrend any chance of further price rise. Almost always the appearance of these candles leads to the price fall.

After the appearance of a doji on the chart the opening/closing level of the doji will serve as the support/resistance level.

The «three stars» pattern is met very rare but this is a very important reversal pattern. The «three stars» pattern is formed by three doji candles the medium of which is the doji star. (Figure 2).