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How to correctly use Doji candlesticks to spot a reversal?

  • #21
  • Jun 13, 2014 8:31pm Jun 13, 2014 8:31pm
Yeah. Yeah....

All looks great in hindsight...

Doesn't it?

Almost the spelling of a whole new failed active trades or system thread on FF...

Really...why believe me?

DON'T!

Do it for yourself!!!

When others forecast...you analyze!

http://www.forexfactory.com/showthre...46#post7529546
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #22
  • Jun 13, 2014 8:33pm Jun 13, 2014 8:33pm
The only longevity you will find in market...

Is your ability to keep your head while all others are losing theirs...
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Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #23
  • Jun 13, 2014 8:42pm Jun 13, 2014 8:42pm
After thousands of hours in market...

I'm not always right...but I am more often than wrong.

When I take a gain, they are better than my losses...and this is done by nothing more than what you are trying to do...

Analyze a candle.

http://www.forexfactory.com/showthre...74#post7533374
http://www.forexfactory.com/showthre...38#post7533238
http://www.forexfactory.com/showthre...86#post7533086

Will eventually look like:
http://www.forexfactory.com/showthre...45#post7518645
http://www.forexfactory.com/showthre...72#post7516372
http://www.forexfactory.com/showthre...86#post7510586
http://www.forexfactory.com/showthre...41#post7505441

As the saying goes...

Keep your pecker up, dude...

It is a tough row to hoe...but when ya get it, it fills your dreams.

Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #24
  • Jun 13, 2014 11:01pm Jun 13, 2014 11:01pm
Quoting Magix
The only longevity you will find in market... Is your ability to keep your head while all others are losing theirs... {image}
Hi Magix,

Would respond to some of your other posts, but I fear I will end up subscribing to the recycle bin. Glad to see you have not changed, thought you were getting soft on me.

Another level I like, since it did not come up....

Then again, it is late on Friday night and I don't think I can be held responsible for posting nonsense.
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The world you desire can be won. It exists.. it is real.. it is possible..
  • #25
  • Jun 13, 2014 11:37pm Jun 13, 2014 11:37pm
Quoting Mr. Scott
{quote} Hi Magix, Would respond to some of your other posts, but I fear I will end up subscribing to the recycle bin. Glad to see you have not changed, thought you were getting soft on me. Another level I like, since it did not come up.... Then again, it is late on Friday night and I don't think I can be held responsible for posting nonsense. {image}

Like everything else, Mr. Scott...

Sometimes others need to be tuned in...other times, people need to be tuned into them...

In this case, it really was 2 birds with one stone.

It is Sad how their corpses just linger...

As far as the charts go...I cannot disagree with you...but I will say, that as tempting as it is, it is best to never put the cart before the horse.
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Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #26
  • Jun 13, 2014 11:51pm Jun 13, 2014 11:51pm
Quoting Magix
{quote} Like everything else, Mr. Scott... Sometimes others need to be tuned in...other times, people need to be tuned into them... In this case, it really was 2 birds with one stone. It is Sad how their corpses just linger... As far as the charts go...I cannot disagree with you...but I will say, that as tempting as it is, it is best to never put the cart before the horse. {image}
Sure my brother just zoom out to make me look silly.

When you are not winning, change the tf,

Scott
The world you desire can be won. It exists.. it is real.. it is possible..
  • #27
  • Jun 13, 2014 11:53pm Jun 13, 2014 11:53pm
Quoting Mr. Scott
{quote} Sure my brother just zoom out to make me look silly. Scott


It's not that...

Not that at all!

You slay me!

Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #28
  • Jun 14, 2014 5:06am Jun 14, 2014 5:06am
Hi Magix, excellent stuff. I never thought about it that way. With the finding of S/R areas on larger time frames and then looking on smaller time frames how PA is around that area is really not rocket science. But there is so much distracting stuff around, just like you said. Even the "normal life" things you have mentioned. If you are doing so, it really does not matter if there is a doji or whatever if the levels are watched closely. The question is just: What about somebody who does not have the time? And can only check the market several times a day - should he not be trading?
Fix up, trade sharp ...
  • #29
  • Jun 14, 2014 6:26am Jun 14, 2014 6:26am
Ohhhhh... absolutely my new favorite thread. Great stuff Magix. Subbed...
Ghost Rider - WWTBMD?
  • #30
  • Jun 14, 2014 8:05am Jun 14, 2014 8:05am
Quoting Hickson
Hi Magix, excellent stuff. I never thought about it that way. With the finding of S/R areas on larger time frames and then looking on smaller time frames how PA is around that area is really not rocket science. But there is so much distracting stuff around, just like you said. Even the "normal life" things you have mentioned. If you are doing so, it really does not matter if there is a doji or whatever if the levels are watched closely. The question is just: What about somebody who does not have the time? And can only check the market several times...
Candle patterns aren't specific to any single time frame, the only real thing that changes in these observations...is the range.

As we move to a larger candle, is the information any less relevant?

Here is an M15 chart, applied to the Daily Candle.

Still looking for the same thing as we are applying the Hourly to the M1 or M5 charts...

The basic principles are still in effect on the structure. If current price is above the daily open, we are currently bullish...if current price is below the daily open, we are bearish...

Using a single line to market Daily Roll over, or the larger time frame candles can help keep you in the safety of direction. I still toggle through the weekly and monthly candles watching these levels. Are we long on the day, short on the week? Are we long on the hour, short on the day? These help establish direction and can provide a reasonable expectation for where support and resistance may be...
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Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #31
  • Jun 14, 2014 8:19am Jun 14, 2014 8:19am
Quoting Hickson
The question is just: What about somebody who does not have the time? And can only check the market several times a day - should he not be trading?

As for this question...that time you have to commit to market, should help define the ranges you trade and the the methodology you apply to your trades. Probably the most important part of this, is consistency.

Do you have the same amount of time to commit, every day...and is it at the same time?

Really it is going to boil down to match pair relevance to the market you should be trading.

Do you trade EURUSD during the AUD session open?

Each trade pair have their own personality...each trade pairs have their most specific relevant sessions...if you find yourself toggling through the charts on off sessions and trying to find consistency, the market can become a very hard place to stay.

Pick the pairs that are relevant to the time you can commit.
Pick the time frame of reference that is conducive to your success.

Adjust the ranges accordingly.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #32
  • Jun 14, 2014 10:13am Jun 14, 2014 10:13am
Getting back to the basis of this thread. This is what you look for OP, the Doji on the chart is an H4 doji, it is in the right spot, higher than anything else to the left and the market behaved according to the way a weak market should. The market went back up to that spot again on may 8th and was rejected violently. Think of it in logical sense, the wicks can be looked at like a probe, the market goes in both directions but only one side takes the bait, if you go down to the one hour timeframe you would see a price action call a top reversal, and it's one of the things you would expect in a weak market. If you look at an h4 and above chart you would see that price is rejected many times, if you just trade opposite of those wicks with good analysis it would be hard not to make money, just wait for price to be rejected at least 2 times then use good MM.what you are looking for is price rejection.

The market now is down in another zone on the Daily 1.350-1.345 seem like it is proper support, We will see how it plays out over the following days, If it breaks you know what's going to happen so I am not going to bore you with that. Anyway, don't assume anything I say is correct, I could be wrong, research for yourself. Assume anyone who talks can't trade and you would do fine. Trading is not that hard, it's just like basketball in a sense, the top and bottom mark the lines and the game is played inside. Hope that helps.
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Being a trader is lonely, but being a great trader is lonelier still
  • #33
  • Jun 14, 2014 10:39am Jun 14, 2014 10:39am
Well...There you have it...

At an even more pathetic attempt at being relevant...let's have a looksie as to how Sane things Dojis can be used...

Special Notes:
1. You need a time machine to travel back to take trades with these, because apparently, in the last month, there hasn't been one available to trade.
2. The H4 chart is the most worthless, as applied to market chart, you will find. This will distinctly be different given your broker open and close on the weekly...and then what? Market opens and you need to hop back into your time machine to take your trade?
3. You will only know proper resistance, as stated by sane, when price is 400 pips away...again, with the time machine...
4. Wicks are probes... I don't think I want to challenge sane and his expertise on probes...but it is amusing.
5.
Quoting saneblane
If you look at an h4 and above chart you would see that price is rejected many times, if you just trade opposite of those wicks with good analysis it would be hard not to make money, just wait for price to be rejected at least 2 times then use good MM.
Of course if you actually look at the chart...you can see that price was only rejected once...so, even with a time machine, you are still waiting for this second rejection.

This is why a lot of FF members are so confused. Guys like this, needing to try and validate their own existence with a chart and commentary that is completely irrelevant, and doesn't even match with any of the trade description offered.

Quoting saneblane
The market now is down in another zone on the Daily 1.350-1.345 seem like it is proper support, We will see how it plays out over the following days, If it breaks you know what's going to happen so I am not going to bore you with that. Anyway, don't assume anything I say is correct, I could be wrong, research for yourself.
Down another zone?


And this is gauged how?
Another Doji?
Or will we have to wait another month and see if this is actual support by a doji that sane can post at the end of July, early August?

Way to prove my point...


Quoting saneblane
Lol I don't trade on charts so I had to go see for a sec.
Now, I understand why...
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #34
  • Edited 11:21am Jun 14, 2014 10:47am | Edited 11:21am
Quoting Magix
Well...There you have it... At an even more pathetic attempt at being relevant...let's have a looksie as to how Sane things Dojis can be used... Special Notes: 1. You need a time machine to travel back to take trades with these, because apparently, in the last month, there hasn't been one available to trade. 2. The H4 chart is the most worthless, as applied to market chart, you will find. This will distinctly be different given your broker open and close on the weekly...and then what? Market opens and you need to hop back into your time machine...
Why are you spamming the guys thread Magix? You're just trolling the man's thread, he ask for a Doji, and you haven't said shit about it. that's a doji at the top of the market, it's basic common sense. This might be the third chart I posted here so I don't know what the hell you are talking about. Like I said this is not the market, you are not making any money here for talking shit, so take it easy

"Of course if you actually look at the chart...you can see that price was only rejected once...so, even with a time machine, you are still waiting for this second rejection."

Go back and check your chart before you say shit, where do you think the EUR and CHF, were sold from, it's that very same zone on may 8th. You didn't even watch the chart to see if what I was saying was true, you just spammed the thread again for no reason. And now we are done in a zone on the day 1 chart where the market headed north previously, again you didn't even look to see if what I said was true, sigh. Start your own thread if you want to teach trading basics, the man ask for a doji. How hard is it to explain a market reversal doji, you just posted a whole bunch of drivel, and stole the thread. Unbelievable

"And this is gauged how?
Another Doji?"

That has got to be the most stupid thing I have seen, you believe that a Doji is the only sign of weakness or strength? Lol where do you people come from. This is trading man, you mark the spots where you know have the biggest imbalances of buyers and sellers and you trade them. unbelievable the kinds of idiots that FF has. I already told you, that you are the best trader on FF, since that's what you want to hear. So bugger off and go start your own thread and stop spamming the man's thread with shit. Look at the chart, the same exact spot where the Doji happened sent the market plunging a whole month, the market hasn't even recovered yet from it, and you know why I called it a real Support? it's Because of the amount of selling that happen there, about 4 times what happened compare to any other time on the chart, before may 8th, I'm surprise you don't know something as basic as that, because you know everything right?. It's just basic trading, it's not even anything special, but you seem to think you have monopoly on knowing eveything. Trolls like yourself just want to post shit to impress people to feel good about themselves. It would be funny if it wasn't so pathetic.
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  • #35
  • Jun 14, 2014 11:18am Jun 14, 2014 11:18am
Quoting saneblane
It's just basic trading, it's not even anything special, but you seem to think you have monopoly on knowing eveything. {image}

Well sane...you've got me pegged...so, as for your vast knowledge of markets...

The next time somebody asks, when should I have sold, LAST YEAR??...or when should I have bought, LAST MONTH??...

I will tell them that, You are the Man to ask!

In fact, if I ever want to know what has already happened, I won't bother looking at a chart...you will be my go to guy...K?

Hey Sane...when in 2012, should I have bought the dragon?
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #36
  • Jun 14, 2014 11:47am Jun 14, 2014 11:47am
Quoting Magix
{quote} As for this question...that time you have to commit to market, should help define the ranges you trade and the the methodology you apply to your trades. Probably the most important part of this, is consistency. Do you have the same amount of time to commit, every day...and is it at the same time? Really it is going to boil down to match pair relevance to the market you should be trading. Do you trade EURUSD during the AUD session open? Each trade pair have their own personality...each trade pairs have their most specific relevant sessions...if...
Since the time differs and I cannot be at the screen all the time, I have to rely on picking good setups with reasonable stops and TP areas. Furthermore, I am working more on using limits instead of market orders. With this, the risk of running out of patience is also lower. The market shows your weaknesses without any sentiment. If you tend to chase a good entry and get stopped out a few times, the market just does not care.

Yet a serious analysis has to be done, no matter how much time you have - but when, and how long? The weekend should be a good time to look at the current ranges on daily, then place limits. Several times a day, I might check if there is something changing to adjust my trading plan if needed. To do this, it is probably unevitable to look at weekly and monthly for S/R areas for long term success.

Trading a specific pair during a session where enough volatility exists comes into play when scalping or having intraday positions, but probably less when being fine with leaving the position for several days or a week. My ultimate goal is to have long term positions that can run weeks and months, but I am not good enough at trading yet.
Fix up, trade sharp ...
  • #37
  • Jun 14, 2014 11:57am Jun 14, 2014 11:57am
Quoting Magix
{quote} Well sane...you've got me pegged...so, as for your vast knowledge of markets... The next time somebody asks, when should I have sold, LAST YEAR??...or when should I have bought, LAST MONTH??... I will tell them that, You are the Man to ask! In fact, if I ever want to know what has already happened, I won't bother looking at a chart...you will be my go to guy...K? Hey Sane...when in 2012, should I have bought the dragon?
Sigh, ok man whatever.
Being a trader is lonely, but being a great trader is lonelier still
  • #38
  • Jun 14, 2014 12:17pm Jun 14, 2014 12:17pm
Quoting Hickson
Yet a serious analysis has to be done, no matter how much time you have - but when, and how long? The weekend should be a good time to look at the current ranges on daily, then place limits. Several times a day, I might check if there is something changing to adjust my trading plan if needed. To do this, it is probably unevitable to look at weekly and monthly for S/R areas for long term success.

Having an idea of market cycles will be a little more key to your success with weekend analysis and basing on a weekly to monthly chart.

Trying to figure out what will happen in the next hour can be a challenge, trying to gauge a new week off the previous, even more so.

Where does market open, in relation to where it closed?

This is what typically upsets the apple cart on the time you have committed to your weekend studies.

Why I was questioning the idea of watching EURUSD during AUD open, is because this is the beginning of the daily candle. NY roll over, is 5PM, EST. Roll over, typically when you get hit with your swap fees...you can always watch for a little whip inside of this time, but then on from there, watching what price does, is what can help you in setting these trades and ranges.

Look at the little yellow box on this chart...this is the dead session...NY has just closed, TK and London aren't anyplace near a start of their day...but we can still watch this area.

The daily candle previous was long...could we assume that this one would be as well?

Depending on what you are watching and when you are watching...you can. But, you still have to have an idea of where this day started so you can have an idea of where you may find profit and where you will need to cut orders.

This too is on a daily chart...might still be short of the range that you are intending, but can still lend a little information to what you are wanting to do. If you are currently long and you can see the price at NY roll over...it is actually reasonable to assume that if price pierces this line, it is a good place to have stops. If you were just looking at trading off the dailies, you can see that if you had gone long at this line and set stops below...you may have exited with profit, depending on the range you choose...or you would have been stopped out, because the daily roll was heavily violated.

I study the independent market sessions. Study the various time frames in relation to others. And try to use this information to see the weekly cycles. Some base these cycles on what news will be present in the week...others like myself, could give a shit less about the fundamentals, and only watch the candles. However you do it...it is something that need be done. Getting caught next week looking for a swing position in either direction, could conceivably see you stopped out, longs and shorts on any given day and every day...Next week, if I am not mistaken, is a week full of chop. Reading through the noise won't be easy.

I do appreciate what you are looking for.

Just wanted to point out a couple of things that may be of some value.



Chart!
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  • #39
  • Jun 14, 2014 1:09pm Jun 14, 2014 1:09pm
Just a quick post to the OP about Doji's and why Magix mentioned the 4H is perhaps the single most useless TF of all the charts. I agree. Taking the May 8th EUR/USD example I've read here.

The first is a daily chart marking that May 8th candle. The 4H and 1H charts follow. As you can see, if we who have different broker times were looking for a 4H Doji, I guess we're out of luck on this trade signal.

The strong SR above (Blue line on daily) is evident to everyone regardless of broker time, I hope. And you can see I have it marked on the others as well. But the 4H candles can be very misleading between different broker times. Now on mine a small Doji appears on the 1H. A good signal? Perhaps based on how you trade. Taking a short on it's close could be a very good trade IF you're the type to allow for a wide SL. In this case, (and in hindsight) 55 pips or more would do.

But not knowing ahead of time, how many would a) give a SL that wide and b) not freak when price ran up to it? If you're experienced with SR zones, you might have no problem. If not, 9 out of 10 would probably have closed or let a lesser SL get hit for a loss and then, of course, price RAN downhill.

In my opinion, Magix is giving a great break down of the only things that really matter in trading. Support and Resistance, PRICE, and the "structure" of it's action within candles at SR.
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  • #40
  • Jun 14, 2014 2:15pm Jun 14, 2014 2:15pm
Quoting Ponzi Jr
The occurrence of a Doji candlestick is often regarded as a sign of a potential reversal. However, other times it is actually just a brief period during which bulls/bears are catching their breath - after which the initial trend resumes. What other signs are there that a doji signifies that a reversal is about to occur?
A long time ago I read some some books on stuff.....
A man named Kahn wrote a book on technical analysis. I read it all, in parts a cure for insomnia.
Some of his charts were upside-down examples of stock patterns, as he admitted later, and showed the repeatability of some patterns.

....and then after reading a lot of bollocks, mostly here in FF, about pin bars, shooting stars and outside engulfing candles - I read the bible as written by Steve Nison. Very interesting.....

...and then I continued my screen vigil.

So this is what a doji really is, it is a congestion zone; an exhaustion if you will. What you don't know is whether it is temporary or final!
Spot a doji on a 4hr chart? Zoom-in to 15-minutes, or 5-minutes, and look at what is there. Does that look like a flag?
Even the Japanese have said (according to Herr Nison) that some modern indicators are a useful supplement to candle analysis.
I read that as an admission that candle patterns on their own are incomplete, and after many hours in front of a screen you will agree.

It is a long road...
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