My Infima Forex

Doji Candlestick Forex Trading Secrets

When a doji candlestick is spotted in the market, first look back to see if there’s been enough movement for you to profit from a retracement. A reversal may only be about one 3rd of the distance since the last low.

Step two involves checking an oscillator to be certain the current price is shown as oversold or overbought. Either the RSI (relative strength index) or MACD (moving average convergence/divergence) may be employed for this reason. An oversold or overbought market plus the doji is a pointer that you can get involved.

You may also look at the trading volume. If trading is trailing off, then this is another sign that a reversal might be about to occur. When you open a trade, be prepared initially for a retracing. Either set a limit order at the point that you would expect a short term retracement to reach, or watch and do this by hand. Naturally, there’s always a risk, as with any kind of hopeful trading. So we recommend checking out these doji candlestick trading strategies in a demo account so that you know how to work them successfully before going live.