One type of candlestick that is often used by traders is the Doji Candle. This Doji candle will greatly help traders to provide information about a trend reversal. This Doji candle has several types that are commonly used. This time we will learn one type of Doji Candle itself, namely Bullish Doji. Which will be explained briefly about Bullish Doji along with the types and how to read them.

Bullish Doji is a candlestick pattern that will tell you that a downtrend or bearish trend has ended and an uptrend or bullish trend is starting. Which is a point for traders to start buying stocks. For more information about this bullish doji, you can learn it through the summary below. Before that, if you are trading, but are confused about using the various candlesticks available, then you can fill out the Trader Assessment so that you can consult your trading on GIC.

What is Doji?

Doji is the name of a type of candlestick that is commonly used by traders to find out information about a trend reversal. Doji itself is a candlestick that is formed when the opening price and closing price are almost the same in a certain period of time. In general, this doji pattern will indicate a reversal in a trend in the capital market.

In Japanese, “Doji” means blunder or mistake, which refers to the rarity of opening and closing prices that have the same or almost the same. Doji is a candlestick pattern consisting of the open and close prices that will be the same or almost the same, so that the candle may not have a body or if it does, the body will be very small. This formation will often be seen on trading charts, which of course depends on what time frame you will use later. The Doji can be formed on weekly, daily or 5-minute charts. Before discussing the differences between doji and other candlesticks, you can fill out an internal survey so that GIC can improve all performance on the platform itself.

Difference between Doji and Spinning Top

Spinning top candle is a candlestick pattern that is characterized by having a short body but long lower and upper shadows. This spinning top pattern will indicate market doubt about price movements the following day. The spinning top candle will form when buyers are pushing up prices in a certain time period and will eventually trigger a price decrease in the same time period, but in the end the closing price will end in the same range as the opening price.
 
The similarities between spinning tops and doji are that both represent doubt. Doji is smaller in shape, with a small real body and small shadows at the top and bottom. While the spinning top has a long upper and lower shadow. In both patterns, it usually occurs frequently and is sometimes used to warn of a reversal after a strong price movement. Both types of candlesticks are very dependent on confirmation. A strong movement after a spinning top or doji will tell you more about the direction of a new potential price than the spinning top or doji itself.

Doji Limits

Doji candlesticks are neutral indicators that usually provide little information. In addition, dojis themselves are not common. Therefore, dojis are not a reliable tool for finding things like price reversals. When they do occur, dojis themselves are not always reliable. There is no guarantee that the price itself will continue in the direction expected after the confirmation candle. The size of the doji's tail or wick plus the size of the confirmation candle can sometimes indicate an entry point for a trade that is further away from the stop loss location itself.
 
This means that traders also need to find another location for the stop loss position, or even you may need to abandon the trade because it is too large from the stop loss and may not justify the potential reward of the trade. Estimating the potential reward of a trade informed by dojis can also be difficult because the candlestick pattern usually does not provide a price target. For other techniques, such as indicators, candlestick patterns, or other strategies are also needed to be able to exit the trade at a profitable time.

Apa Itu Bullish Doji Star?

Pola ini adalah sinyal dari pembalikan dasar utama. Terdiri dari candle hitam yang pada hari pertama dan kemudian diikuti oleh doji pada hari berikutnya yang memiliki celah turun untuk bisa membentuk sebuah doji star. Pada hari ketiga akan terbentuk candle putih dengan harga penutupan yang ada di dalam candle hitam pada hari pertama. Bullish Doji Star akan muncul dalam tren turun dan juga termasuk pada kelompok pola pembalikan yang naik. Untuk jenis konfirmasi yang lebih kuat lainnya, adalah ketika suatu garis tren turun atau zona resistancenya telah ditembus.

Bullish Doji Star Candlestick Recognition Criteria

Bullish Morning Doji Stars is a rare reversal pattern that will offer one of the strongest Bullish reversal signals in the Forex Market. The Morning Star formation will be marked by the continuation of the Bearish trend followed by a Doji, which usually reflects uncertainty in the strength of a trend. The key to this indicator is usually in the middle candlestick, because the candlestick is an indicator of a competition between sellers and buyers. If the middle part has formed a doji, then the trend reversal signal will be stronger.

For the characteristics of the bullish doji star candlestick, namely, the market is in a downtrend, a black candle is formed on the first day, a doji is formed on the second day by forming a gap down, and a white candle is formed on the third day. You can understand these recognition criteria and teach them to your friends who want to trade. Also make sure to invite friends or join as IB and get benefits such as additional income, material, and others.

Pattern Requirements and Flexibility

Bullish morning star will start with a black candle that must be continued with a doji with the opening price of the doji lower than the closing price of the first day so that a gap down is formed. This Bullish Doji Star should start with a normal black candle or a long black candle. The pattern must be continued with a Doji that has a gap down. On the third day for the white candle, the opening price will be the same as or can be higher than the doji with the closing price being inside the body of the black candle on the first day.

Trader Behavior

The market is in a downtrend and also a strong black candlestick will confirm it further. The next day will open lower with a gap down, and the trading will be in a small range. The day will close at the opening price, which causes the formation of a Doji itself. The decline can be controlled during the downtrend, but a change is implied by the appearance of the Doji Star, which will indicate that the bulls and bears are in balance. The downtrend is also reduced. Conditions are unfavorable for the continuation of the downtrend.

The market is in a downtrend and the black candle will confirm the continuation of the downtrend. The emergence of a doji that is creating a gap in the downtrend will indicate that there is still selling pressure that will push the price down again. On the third day the white candle will have an opening price above the doji candle and then close in the body of the black candle on the first day. This is a signal that a trend reversal has occurred.

Buy/Stop Loss Levels

The buy confirmation level will be determined at the closing price of the white candle on the last day. In the next day's trading, the price should be able to pass the confirmation level. However, if the price in the next day's trading does not rise and instead falls, then the stop loss level will be determined at the lowest price of the doji. The confirmation level will be set as the midpoint of the gap between the Doji and the previous candle.
 
The price should cross above at this confirmation level. The stop loss level is set as the basis of the last two bases. After Buy, if the price falls and not rises, and closes or is at a base position below the stop loss level for two consecutive days, meanwhile, if there is no downward pattern that is later detected, then you can stop the triggered loss.

Doji Types

There are several types of doji that you should know if you study Doji Candlestick itself. There are several types, namely:

Long Legged Bullish Doji

Long-leg Doji, as the name suggests means having a Long leg, meaning it has a larger extension on the vertical line above and below the horizontal line. This would indicate that, during the time period of the candle's price movement, it would dramatically move up and down, but close at almost the same level as it opened. This would indicate indecision among buyers and sellers.

Dragonfly Bullish Doji

This Dragonfly Doji can appear at the top of an uptrend or the bottom of a downtrend and will signal a potential change in direction. The absence of a line above the horizontal bar forming the 'T' and is indicating that price is not moving above the open. The very long lower wick on this Doji is based on a bearish move which is a very bullish signal.

The Dragonfly Doji pattern is a pattern formed from a Downtrend movement. In the Doji trading guidelines, this Candlestick shape is a sign that there is a price movement that will reverse direction from the initial Downtrend to an Uptrend. The Dragonfly Doji shape will indicate a dominant Seller sentiment only at the beginning, but when the price has reached its lowest level, the price will suddenly reverse to the highest level quickly. This will indicate the Buyer sentiment that comes to dominate the price movement.

Gravestone Bullish Doji

This Gravestone Doji symbolizes a more dominant Buyer power at the beginning, but will soon be crushed by the enormous Seller power. The price that initially reached the highest level, can suddenly quickly reverse towards the lowest level and close in that area. If this Doji Candlestick pattern is formed from an Uptrend movement, then this can be a signal that the price will reverse direction towards a Downtrend. After knowing the type of doji, you can also trade on GIC by downloading the GIC Mobile application on the App Store or Play Store on your gadget.

How to Read Candle Patterns

This candlestick pattern cannot be understood in just one variation. You must know the previous price movement. Because the previous price movement can be a consideration at the end of the trading. And for how to read this candle pattern, you can understand it below.
  1. Observing the shape and size of the candlestick body. If the body or body of the candlestick is large and the tail is small, it will indicate a strong price movement. And if the body is longer and the tail is smaller, then the candle will have good strength. The size of the body will give us information about one of the stronger buyer or seller parts. The size of the body is a big trading moment and the condition of the body shrinking means there is a party that is weakening.
  2. Pay attention to the wick or tail of the candlestick. If you see a long tail and a large body at the end, it indicates a weakening trading moment and a reversal could occur. The volatility of the price movement is determined by the length of the wick. A long wick will indicate a very fast price movement at a certain time after which it will experience rejection due to resistance. If the wick has become longer, its volatility will also increase.
  3. Reading the ratio of the body and its axis. There will come a body position that is in the middle and has two axis tails. This will indicate the strength between buyers and sellers that is balanced. Such a position is also one of the market's doubts. If the axis is getting longer and the body is getting smaller, then the market's doubts will be prolonged.
  4. Look at the body position. If the body of the candlestick is at the end, it will indicate resistance. And if it has a wick above and below it and the body position is in the middle, then there is market doubt.

Bullish Doji Related Questions

Here are some questions that traders often ask when discussing the bullish doji itself. Some of these questions are:

What is Hammer Doji?

The hammer pattern is a pattern that appears after a price decline, where its appearance will indicate a potential change from a downtrend to an uptrend. You can distinguish the shape of this pattern by the shape of the body which is thicker than the doji itself, and has a tail that is longer than the body or the upper axis.

What Is Doji Morning Star?

The Morning Star pattern is a bullish reversal candlestick pattern of three candlesticks that will appear at the bottom of a downtrend. This indicates a slowdown in the downward momentum that precedes a major bullish move and lays the foundation for a new uptrend.

What Is Doji Bearish Reversal?

The bearish reversal pattern will refer to the candlestick formation that will indicate the end of the trend that has occurred, either an uptrend or a downtrend. The formation of the candlestick that occurs in a downtrend represents a bullish reversal pattern or the end of selling and also the beginning of buying. Conversely, the candlestick formation that occurs in an uptrend will indicate a bearish reversal pattern or the end of buying action at the beginning of selling.

What is the Difference between Bearish and Bullish Doji?

The doji formation is included in the candlestick pattern that consists of only one candle. Doji will form when the market is consolidating or hesitant about a direction of its movement at the next price. Then it will be clear that bullish and bearish sentiments are in a balanced state. Between buyers and sellers who are waiting for the next price movement. The market will consolidate and has not yet determined whether to continue a price movement in accordance with the previous trend direction, or will later make a price move in the opposite direction. Therefore, doji will be considered a consolidation signal. And for bearish doji is a weakening of the doji candle, while for bullish doji is a strengthening of the doji candle.

What is Bullish Engulfing?

The bullish engulfing pattern is a pattern consisting of two candles, the first candle is a bearish candle and the next candle is a bullish candle that has a longer body than the previous candle. The bullish engulfing pattern is a signal to open a buy position. However, to be able to obtain the potential for great accuracy, you must ensure that the market movement is trending, and not moving sideways. This is so that you can avoid the potential for false signals that can occur.

What is Bullish Harami?

Bullish harami is a sign of a gap in market strength. In the black body that reflects a large sale, while for the white body it will reflect the strength of the decline. This can signal a trend reversal, from a downtrend to an uptrend. However, bullish harami will not always be a reversal, because it occurred on the infrastructure index chart which on May 24 was experiencing a bullish harami, but the next day the index actually fell and not rose. Therefore, bullish harami will require further confirmation by looking at the close the next day.

After knowing about bullish doji and the types of doji candlesticks, you can look for examples of cases on other platforms or trade yourself and meet the bullish doji conditions, so that you will be more proficient in this candlestick. For those who are still confused about how to read it, you can apply the method explained above. Doji itself has various types, each type of which you must also learn an example of so that you can know what actions to take when the condition occurs. If you want to test yourself with trading conditions, you can take the Preliminary Test to find out how far you understand all trading conditions themselves.