BQLearning: What Are Doji, Morning Star Doji And Hammer Candlesticks?


The pattern requires confirmation from the next candlestick closing below half-way on the body of the first. So for example, if the market is in a downtrend, you can look for it to pull back to a moving average, pullback to previous support turned resistance, or whatever. Because understanding the meaning is what matters, not trying to memorize the exact candlestick pattern. One thing to share first is don’t make this mistake when you’re trading the Doji candlestick pattern. One thing to take note is that a Doji has no body on the candlestick pattern. A typical example of confirmation would be to wait for a white candlestick to close above the open to the right side of the Hammer.

You should consider whether you can afford to take the high risk of losing your money. It is important to note that the Inverted pattern is a warning of potential price change, not a signal, by itself, to buy. As always, use the pattern wisely, in combination with other tools, to make informed and successful trading decisions. On the other hand, if a Doji appears in the midst of a range-bound market or during a period of consolidation, it could signify uncertainty or a lack of momentum in the market. Another benefit of this strategy is that it’s relatively simple to identify. This makes it ideal for beginners just starting in the currency pair market.

Forex, Gold & Silver:

Depending on the confirmation that follows, Dojis might indicate a price reversal or trend continuation. The hammer, on the other hand, appears after a price drop, suggests a probable upside reversal , and has just a long lower shadow. Under these circumstances, the signal you’re keeping an eye out for is a hammer-shaped candlestick with a lower shadow that is at least twice the size of the real body. The closing price may be slightly above or below the opening price, although the close should be near the open, meaning that the candlestick’s real body remains small.

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You will improve your candlestick analysis skills and be able to apply them in trading. The limitation of the hammer candlestick is that it might not signal a long-term new trend but only a temporary change in the movement. The ultimate result of Doji candlesticks means neither buyers nor sellers are able to gain control and a struggle is ongoing between them.

Is hammer a doji candle?

There are four main types of Doji candlesticks which are commonly found in technical analysis. These include the Standard Doji, Long-legged Doji, Gravestone Doji, and Dragonfly Doji. INTC daily wave 2 of uptrend probably I’m already in you can move your entry above next day candle if it closes above today’s doji and completes morning star reversal. Naturally, it’s essential to use them in conjunction with other technical indicators to form a complete trading strategy that maximises the information these patterns provide.


The main difference between the two patterns is that the Shooting Star occurs at the top of an uptrend and the Inverted Hammer occurs at the bottom of a downtrend . To some traders, this confirmation candle, plus the fact that the downward trendline resistance was broken, gave them a potential signal to go long. On the other hand, if the dragonfly doji appears in the middle of an uptrend with high trading volume, it may suggest a continuation of the bullish trend. A Dragonfly Doji has a longer lower shadow compared to the Hammer, which has a shorter lower shadow. Additionally, the Dragonfly Doji can have an upper shadow, while the Hammer usually does not. This difference indicates that there is more bullish pressure present in the Dragonfly Doji, as there is a fight for control between the bulls and bears.

Candlestick Bullish Reversal Patterns

Below is an analysis of the hanging man pattern on the BTCUSD H4 chart. The picture shows that after the pattern appeared at each of the local tops, BTCUSD was very actively declining at some points. Each pattern that appeared on the chart warned traders that the trend was ending and bearish resistance was hindering growth. Therefore, in these cases, it is important to exit the purchase and wait for confirmation of the reversal. There is no assurance that the price will continue to move to the upside following the confirmation candle.

The only difference between them is whether you’re in a downtrend or uptrend. When the price is rising, the formation of a Hanging Man indicates that sellers are beginning to outnumber buyers. The trade was successfully closed manually with a profit of $3.80. Below are examples of short-term trading using different instruments according to the above patterns. This pattern is most often used in conservative strategies due to its importance on price charts.


A green candlestick means the closing price is higher than the opening price, which means bulls were able to reject and overcome bears completely. Hammer and Inverted Hammer signal a potential defeat of sellers and bottom out of a downward trend. The success of trade using Marubozu depends on the ability to identify that Marubozu is forming. For example, in a 4-hour Bullish Marubozu, the buyers were dominating the entire 4-hour period. Furthermore, a 1-day Bearish Marubozu means that the sellers were so strong the entire day that the price has closed at the day’s low.

Bullish doji star

Even though there was a setback after confirmation, the stock remained above support and advanced above 70. Choose between a live account to trade CFDs or spread bet straight away or practise first on our demo account with virtual funds. A gravestone doji pattern is the dragonfly doji flipped upside down.


The height of the upper shadows can vary and the resulting Doji candlestick looks like a cross, an inverted cross, or a plus sign. Confirmation occurred on the next candle, which gapped higher before being bid up to a close far above the hammer’s closing price. Traders generally enter the market to purchase during the confirmation candle. If the price is going aggressively upward during the confirmation candle, a stop loss is put below the hammer’s low, or perhaps just below the hammer’s true body.

What are the benefits of using the shooting star pattern strategy?

A Doji candlestick pattern is considered to be neither bullish nor bearish, as it represents indecision in the market. It occurs when the opening price and closing price are almost the same, leaving a small real body with long upper and lower shadows. The hammer is considered a bullish reversal pattern in technical analysis. It is a single candlestick pattern that shows a possible trend reversal from a bearish trend to a bullish one.

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The opening and closing prices are usually the same or very close together, and this Doji candlestick appears when the market is indecisive. It is a neutral pattern, indicating that neither buyers nor sellers are in control. To identify a gravestone doji, you need to look for a candlestick on a chart that has a long upper shadow and no lower shadow. The body of the candlestick should be small or non-existent, with the opening price and closing price at the same level as the low price.


The first step is to ensure that what you’re seeing on the candlestick chart does in fact correspond with a hammer pattern. Hammers aren’t usually used in isolation, even with confirmation. Traders typically utilize price or trend analysis, or technical indicators to further confirm candlestick patterns. Confirmation occurs if the candle following the hammer closes above the closing price of the hammer. Candlestick traders will typically look to enter long positions or exit short positions during or after the confirmation candle. For those taking new long positions, a stop loss can be placed below the low of the hammer’s shadow.

However, other technical analyses need to be considered to predict the stock trend after a Dragonfly doji. The pattern needs to appear within a trend, be confirmed on the following candle, and backed up by increased trading volume to be considered a significant trend reversal indication. Market confidence and overall investor sentiment also play crucial roles in determining the stock movement after a Dragonfly doji. In a bullish doji, the long lower shadow indicates that the price traded much lower than the opening before buyers stepped in to push the price back up to the opening level. This indicates a shift in sentiment from sellers to buyers and a potential buying opportunity. The Rising Method consists of two strong white lines bracketing 3 or 4 small declining black candlesticks.

Hanging Man and indicate that buyers are losing their strength to sellers, who are likely to take over and reverse the trend downwards. The reversal needs to be confirmed by the following bearish candle. Even though a prior downward price trend is essential for a candle to be a Hammer or an Inverted Hammer, the candle itself can be either bullish or bearish. If a Bearish Spinning Top occurs during an uptrend, it typically signals a reversal downward. What happens on the next day after the Inverted Hammer pattern is what gives traders an idea as to whether or not prices will go higher or lower.

With over a quarter-million retail traders in the HaiKhuu Trading communities, we have been able to help out hundreds of thousands of stock traders. This could lead to a decline in prices as investors begin to sell and take profit. We have had the pair ranging for two month forming two Doji Patterns on MN and a inverted hammer last week. Derivatives are leveraged products and can result in the loss of your entire deposit.

After a Dragonfly doji, market trends can go in multiple directions, and the situation changes with multiple factors’ influence. Hence, a comprehensive technical analysis is required to make an accurate prediction of the market trend. In the short term, a Dragonfly doji can be followed by increased buying activity, which could imply that more bullish investors are coming into the market. On the other hand, a Dragonfly doji’s appearance after an uptrend could suggest that market participants are losing interest in holding long positions.

During or after the hammer doji candle, candlestick traders will generally attempt to acquire long positions or exit short positions. Confirmation of a hammer signal occurs when subsequent price action corroborates the expectation of a trend reversal. In other words, the candlestick following the hammer signal should confirm the upward price move. Traders who are hoping to profit from a hammer signal often buy during the formation of this upward confirmation candle. Hammer candles are one of the mostpopular candlestick patternsin technical analysis. maintains a list of all stocks that currently have common candlestick patterns on their charts in the Predefined Scan Results area.

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