2 Doji Candlesticks Forex Breakout Strategy can be used when you notice two doji candlesticks form one after the other.
You really don’t care about whether the market is going to go up or down because whichever way it goes, you want to catch that breakout so what you do is place pending buy stop and sell stop orders on both sides to capture that breakout.
Timeframes: 4hr and daily
Currency Pairs: Any
Candlestick Pattern: doji
Forex Indicators: none
Here are the trading rules:
- Watch until you spot 2 consecutive doji candlesticks on the charts
- next thing you do is mark the high and low of the doji borders
- wait for the third candlestick to close
- if the third candlestick closes above the upper border, buy at market and place your stop loss 2-3 pips below the low that you marked in step 2 or you can place it 2-3 pips below the low of the third candlestick.
- if the third candlestick closes below the lower border then sell at market and place your stop loss 2-3 pips above the high that your marked in step 2 or you can place it 2-3 pips above the high of the third candlestick.
- for profit target, you can use previous swing highs for buy order and swing lows for sell order or you can target three times what your risked.
ADVANTAGES OF THE 2 DOJI CANDLESTICKS FOREX TRADING STRATEGY
- a very simple trading system based on price action.
- potential for explosive price moves that can get you hundreds of pips easily after the breakout.
- risk to reward is great when trade goes as expected and can bag you hundreds of pips easily.
- the setup may not happen frequently so you may need to watch a lot of currency pairs to make sure you catch this trading setup happening.
Don’t forget to share this.