Doji Candlestick Currency Trading Methods

When a doji candlestick is spotted in the market, first look back to determine whether there was enough movement for you to profit from a reversal. A reversal may only be about one third of the distance since the last low. If that gives you sufficient room to cover your spread and make allowance for a little slippage, you can go on to step 2. An oversold or overbought market plus the doji is an indication that you can get involved. If trading is trailing off, then this is another sign that a reversal could be about to occur.

When you open a trade, be prepared initially for a retracement. 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. At this point, you may want to close just 1/2 the trade. With the other half, you might move the stop to a no-lose position close to your opening price, and let it run in case a major reversal happens.

Naturally, there’s always a risk, as with any form of hopeful trading. You have to know what you are doing and this type of trading requires a large amount of practice, although it’s a easy system.