Double Doji Candle Pattern

The Double Doji Candle pattern comprises two Dojis and indicates a trend reversal. This guide will mention the pattern and how you can trade it.

What is the Double Doji Candle pattern?

A Double Doji Candle is a rare candlestick pattern identifying potential price reversals. A single Doji candlestick indicates indecision in the market. It occurs when the opening and closing prices are very close to each other, resulting in a small candlestick body.

When two Doji candles appear consecutively on a chart, it suggests that the market is experiencing even greater uncertainty and indecision. It is interpreted as a sign that a price reversal is likely to occur in the near future.

Double Doji Candle
Double Doji Candle

Double Doji Candle Strategy

For the Double Doji Candle strategy, first, you have to identify the direction of the trend. If the Double Doji Candle appears in an uptrend, it may indicate that the bullish trend is losing momentum, and we may have a bearish reversal.

On the other hand, if the pattern appears in a downtrend, it signifies that the bearish trend is losing momentum, and we may have a bullish reversal.

It is important to note that the Double Doji Candle is a rare pattern that may not frequently appear on the chart.

Also, you should apply other technical analysis tools like the RSI or trendlines in conjunction with the pattern. You can look for a breakout from a trend line or moving average, or a change in the direction of the RSI.

The Double Doji can appear on any timeframe; however, the pattern can be prone to false signals on shorter timeframes. So, it’s better to look for the pattern on longer timeframes.

Buy Signal

  • The Double Doji must appear in a downtrend.
  • Confirm the reversal with any other technical tool.
  • Wait for the price to go upwards and then enter the trade.
  • Place a stop-loss at the recent low.
  • Exit the long position at the recent high or use any other technical tool for an
Double Doji Candle buy signals
Double Doji Candle buy signals

Sell Signal

  • The Double Doji must appear in an uptrend.
  • Confirm the reversal with any other technical tool.
  • Wait for the price to go downwards and then enter the trade.
  • Place a stop-loss at the recent high.
  • Exit the long position at the recent low or use any other technical tool for the
Double Doji Candle sell signals
Double Doji Candle sell signals

Double Doji Candle Pros & Cons

Pros

  • The Double Doji Candle pattern is easy to identify.
  • The pattern provides clear reversal signals.
  • It can appear on any timeframe.

Cons

  • The Double Doji Candle pattern is rare and may not frequently appear on a price chart.
  • The pattern may not work in all market conditions.

Conclusion

The Double Doji Candle pattern identifies potential price reversals. The pattern is easy to identify and can be used on any timeframe.

However, you should use the pattern in conjunction with other analysis tools to confirm the potential reversal signal.

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