Doji
A candle with a close near its open; it records balance, not an automatic reversal.
What to look for
- Absolute body is below a fixed fraction of full range
- Minimum range filter prevents tiny inactive bars
- Location is labelled independently
The highlighted candle opens at 99.80 and closes at 99.85 within a 2.30-point range. Requiring a minimum range keeps tiny, inactive bars out of the sample.
For a downward follow-through, use the same doji definition and swap the later close and failure points to the opposite sides.When the pattern is confirmed
A later break or close that resolves the balance.
Where the idea is wrong
The opposite extreme of the resolution pattern.
The easy mistake
Doji occur in trends, ranges and illiquid periods; shape alone has little context.
A complete doji example
Place the same small-body candle at the end of a move, at a range boundary and in quiet mid-range trade. Require a minimum total range so tiny inactive bars do not dominate the sample.
First rule to test
Range resolution — enter only when a later candle closes beyond the full doji high-low range.
Alternative rule
Structure resolution — wait for the doji to be followed by a break of the nearest minor swing in the chosen direction.
Place it where the pattern is wrong
Place the example stop one fixed ATR fraction beyond the opposite end of the doji range once the chosen confirmation occurs.
Context, trigger and risk
The pattern handles timing. The other tools decide whether the location makes sense and how far normal price movement can reach.
Shows whether the pause occurs at an extreme or in unimportant chart space.
Filters inactive bars and standardises the stop distance.
Distinguishes a meaningful pause from routine quiet-session candles.
First exit to test
Next structure — close at the nearest opposing swing or range boundary visible at entry.
Alternative exit
Time stop — close after a fixed number of candles if price has not reached the selected structure target.
Patterns need a method around them
Open a related strategy to see the wider market filter, entry, stop, exit and no-trade rule.
Support and resistance rejection
A framework for testing reactions at levels that genuinely predate the trade.
- ENTRY
- Enter at the next H1 open after the first qualifying rejection close back above the prior-day low or below the prior-day high.
- STOP
- Place stop 0.20 × ATR beyond the rejection candle extreme. Risk 0.50% of equity and round down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit after 12 completed H1 bars if neither stop nor target trades.
Range mean reversion
Tests whether qualified boundary excursions revert toward a range midpoint.
- ENTRY
- Enter at the next H1 open after the first qualifying close back inside the frozen range.
- STOP
- Place the stop 0.20 × ATR(14) beyond the excursion extreme and size to 0.50% equity risk, rounded down to 0.01 lot.
- EXIT
- Exit at the frozen range midpoint. If neither stop nor midpoint trades, exit after eight completed H1 bars.
RSI divergence reversal
Tests whether a mismatch between price and RSI swings adds value after exhaustion.
- ENTRY
- Enter next bar open after price closes beyond the highest high of the five bars ending at the confirmed second low for bullish divergence; mirror below the five-bar low for bearish divergence.
- STOP
- Stop is 0.20 × ATR(14) beyond the second price pivot. Risk 0.50% of equity and round down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit at market after 20 completed H4 bars if neither stop nor target has traded.
Try it on older charts
Compare doji at extremes with a control sample of all bars at the same locations.