Learn Profitable Doji Candle Trading Strategy (GOLD, FOREX)
In the today's post, I will share my Doji Candle trading strategy.
This strategy combines the elements of multiple time frame analysis, price action and key levels.
Step 1
Analyze key levels on a daily time frame.
Identify vertical and horizontal supports and resistances.
Here are the key structures that I spotted on AUDUSD.
Step 2
Look for a formation Doji Candle on a key structure.
This rule is crucially important: we will trade only the Doji candles that are formed on key levels.
From key supports , we will look for buying , and we will look for shorting from key resistances .
Look at this Doji Candle that was formed on a key daily support on AUDUSD.
Step 3
Look for a horizontal range on a 4h/1h time frames.
Doji Candle signifies indecision . Quite often, you will notice the horizontal ranges on lower time frames when this candlestick is formed.
Here is a horizontal range that was formed on a 4H time frame on AUDUSD after a formation of Doji.
Step 4
Look for a breakout of the range.
To sell from a key resistance, we will need a bearish breakout of the support of the range. That will be our bearish confirmation.
To buy from a key support, we will need a bullish breakout of the resistance of the range. It will be our bullish signal.
Here is a confirmed breakout of the resistance of the range with a 4H candle close above. That is our bullish confirmation on AUDUSD.
Step 5
Buy aggressively or on a retest.
After you spotted a confirmed breakout of the range, open a trading position aggressively or on a retest.
Personally, I prefer trading on a retest.
If you sell, a stop loss should be above the high of the range and your target should be the closest key daily support.
If you buy, your stop loss should be below the low of the range and a take profit will be on the closest daily resistance.
On AUDUSD, a long position was opened on a retest. Stop loss is lying below the lows. Take profit is the closest resistance.
Here is how this great strategy works!
Always patiently wait for a confirmation! That is your key to successful trading Doji Candle.
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