A lot of reversal patterns in the forex market are in most cases characterized by dojis. A doji pattern usually depicts indecision in the marketplace.
The 2 Doji Candlestick forex strategy makes use of 2 single doji patterns, along with other forex indicators to spot new buy and sell trade setups in the market.
Doji Pattern
Chart Setup
MetaTrader4 Indicators: QuickFib.ex4 (default setting), Quantile_bands_1.3.ex4 (default setting), PVT.ex4 (default setting)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day
Recommended Trading Sessions: Any
Currency Pairs: Any pair
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Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Enter a buy order if the following indicator or chart pattern gets displayed:
- If the 2 doji candlestick pattern is spotted on the price chart, and price breaks above a resistance level of the QuickFib.ex4 custom indicator, a possible breakout to the upside is likely, but confirmation is further needed.
- The rising dodger blue line of the PVT custom indicator indicates a likely bullish signal.
- If price opens and closes above the upper outer band of the Quantile_bands_1.3 custom indicator, price is said to be pressured higher i.e. a trigger to buy the designated currency. The band is filled lime green an indication of bullish sentiment.
Stop Loss for Buy Entry: Place stop loss below support level.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following holds sway:
- If price breaks below a resistance level turned support level, it is an indication of a possible reversal i.e. an exit or take profit trigger.
- If the dodger blue line of the PVT custom indicator declines or dips, it is a trigger to exit or take [profit at once.
- If price closes below the lower outer band of the Quantile_bands_1.3 custom indicator, an exit or take profit is advised.
Sell Entry Rules
Initiate a sell order if the following rules or conditions take center stage:
- If the 2 doji candlestick pattern is spotted on the price chart, and price breaks below a support level of the QuickFib.ex4 custom indicator, a possible breakout to the downside is likely, but confirmation is further needed.
- The falling dodger blue line of the PVT custom indicator indicates a bearish signal in the offing.
- If price opens and closes below the lower outer band of the Quantile_bands_1.3 custom indicator, price is said to be pushed lower i.e. a trigger to sell the designated currency. The color of bands during a sell signal is sandy brown.
Stop Loss for Sell Entry: Place stop loss above resistance level.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following holds true:
- If price breaks above a support level turned resistance level, it is an indication of a possible reversal i.e. an exit or take profit trigger.
- If the dodger blue line of the PVT custom indicator rises during a downtrend, it is a trigger to exit or take profit at once.
- If price closes above the upper outer band of the Quantile_bands_1.3 custom indicator, an exit or take profit is advised.
Sell Trade Example
Fig. 1.1
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About The Trading Indicators
The PVT or Price and Volume Trend custom indicator is deployed in gauging the price to volume correlation.
The working of the PVT indicator is similar to those of the Balance Volume indicator and shows the growing summation of the trade volume relative to the altering prices.
The Quantile_bands_1.3.ex4 is a custom built Bollinger bands trading indicator, here is the middle line a combination of the two outer quantiles.
The QuickFib.ex4 is a line tool that plots Fibonacci retracement levels on the activity chart.