In today’s market, getting strong trading signals might be a challenge. Morning Doji Star is the very Forex indicator pattern that ensures not just an early rise but also delivers a lot of profitable trading opportunities when applied properly.
In this guide, we will show how to improve your Forex trading with this particular indicator as well as understand the theory behind Morning Doji Star making it clear for traders of any level. Some traders think it is the same as the traditional Morning Star pattern. Well, they are different. So, let’s dive in.
Before you apply the pattern to any of your Forex strategies, it is crucial to clarify the theory behind it. Morning Doji Star is a bullish reversal pattern. It can be a good tool to identify the best market position to enter at a swing low trend point when the sellers are completely exhausted by the buyers.
The candlestick itself is available in three different parts. Each part shows the weakening sellers’ power until it is finally obtained by the buyers. When any of these patterns occur, they must be associated with the momentum behind the buyers. Morning Doji Star belongs to the Doji family also known as an indecision candlestick.
As stated earlier, the candlestick consists of three candlesticks. This fact makes it easy for traders of any level to identify it on Forex charts. Initially, you are likely to spot them in downtrends or swing lows.
Another feature that makes it simple to recognize Morning Doji Star is the 3-bar pattern with the following order:
The middle candlestick is the very component that makes the two patterns different. When it comes to the Doji pattern, the middle candlestick expresses the situation when the battle between the buyers and the sellers is closer and none of the parties can overpower the other.
In simpler words, we can observe indecision from the market’s point of view. When thinking over the situation logically, the formation of indecision candlesticks tells us the buyers are becoming to dominate and take control over the sellers who were in control by the time of the candlestick formation.
When the market experiences this kind of indecision, traders should think of how the other side will be able to drum the momentum up. When applied with technical analysis, the logic can provide you with some really good points to enter the market with a trade.
The entire theory behind the momentum of chart patterns can play a vital role. It teaches how to apply logical and well-thought decisions instead of robotically following price action. Candlesticks and Morning Doji Star in particular make it possible to engage with the Forex market at a new level. What’s more, it can be a great instrument no filter out potentially unprofitable trades.
So, we strongly recommend all traders despite the level review the theory to validate and understand how and when different formations of candlestick patterns occur.
When it comes to trading with Morning Doji Star, you need to consider the following steps:
We have learned the theory behind the Morning Doji star and some tips to trade this candlestick pattern. Some traders may wonder why they should ever use it with so many different technical indicators to choose from.
The main reason to use it is the ability to generate even more profitable trading opportunities. Additionally, with this pattern, you can learn how to not just robotically follow price action but also use your trading logic when making specific decisions on a particular trade.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.