What it looks like
Candle one is a long down candle in a fall. Candle two is a doji (open and close at almost the same price, so the body is a thin line) sitting below candle one's close. Candle three is an up candle that closes above the midpoint of candle one's body. The pattern's low is usually the doji's low.
What it means
The doji shows a moment where neither side won: sellers could not extend the fall at all. The third candle then shows buyers taking back more than half of the first candle. Sellers had been in control and this is where they were stopped. It is a sign the fall is tiring, not proof that it has turned.
How to trade it
- 1
Look for it after a fall, ideally at a floor or a level that already mattered.
- 2
Wait for the next candle to close above the pattern's high, then buy.
- 3
Example: on the gold 1 hour chart a morning doji star spans 18 points; the buy is the next close above its high.
- 4
Stop just below the pattern's low, about 18 to 19 points in that example.
- 5
Target the nearest swing high or 2 times the stop.
A close below the pattern's low.
Where it works best
At the end of a clear fall into a floor, on 15 minute and higher charts. A doji at a well known level, such as a previous week low, adds weight.
WickSpeak finds the morning doji star automatically on any chart and names it on the candles that made it. Next to the name it writes what the pattern is, how to trade it and what proves it wrong, in plain English. In Playbook you can use the morning doji star, or any of the 146 patterns, as a condition alongside up to 12 conditions on any of 12 timeframes, then backtest it on past candles with your own costs.
Common mistakes
- Buying the doji itself, before the third candle and the confirmation close.
- Calling any small candle a doji. The body should be almost nothing.
- Ignoring where it formed. In the middle of a range it means little.
Related patterns
Questions traders ask
Is a morning doji star stronger than a morning star?
Many traders treat the doji as a clearer sign of a stalled fall. The rules are the same though: wait for a close above the pattern's high, and a close below its low proves it wrong.
What is a doji?
A candle whose open and close are at almost the same price, so the body is a thin line. It shows neither buyers nor sellers won that candle.
Where do I put the stop on a morning doji star?
Just below the pattern's low, which is usually the doji's low.
What is the difference between a morning doji star and an abandoned baby?
In an abandoned baby the doji gaps clear of the candles either side, with no overlap at all. A morning doji star does not need those gaps.