Trading The Doji Pattern On USDJPY Daily Chart And Making 1200 Pips

Doji is an important candlestick pattern. A doji is formed when the open and the close price are almost equal. When a doji pattern appears on the daily chart, it means explosive movement. This is precisely what happened on USDJPY pair when it moved up 600 pips in a matter of days. Normally USDJPY pair is not known to move a lot. But when we find a doji on the daily chart, just make sure you have entered into a trade in the right direction. Take a look at the following daily chart.

USDJPY Daily Chart

Do you see the highlighted candle in the above chart? This is the doji pattern. The open for this candle was 119.151 and the close for this candle was 119.167. The open and close for this candle are almost equal with a difference of 1 pip only. When the doji pattern forms it means indecision in the market. The market is expecting something big that’s why it is moving in a tight range and unable to decide in which direction to move. Now take a look at the USDJPY H4 chart below which should tell us in which direction the market is going to move and in which direction we should open a trade.

USDJPY H4 Chart

This is the USDJPY H4 chart. A bullish divergence pattern is visible in the above chart. You should be able to spot this bullish divergence pattern. So we enter into a long trade. Our entry is 118.167 and the stop loss is 118.80 giving us a risk of 36 pips. Next day we find a bullish daily candle. We enter a second position at 119.351 and move the stop loss to breakeven for the first position to 118.167. The first position is risk free and the risk for the second position is 19 pips which is very good. We let the trade continue and close the trade at 125.596 giving us a total of 1200 pips.

When you are trading, always try to focus on the candlesticks much more than the moving averages and the stochastics and the MACD. Price action is the ultimate indicator. All the other indicators are lagging. So this one simple doji pattern helped us make 1200 pips.

2 comments

  1. Nice doji candlestick.
    Pls, is this only applicable to USD/JPY pair alone? Or can we also use it on other pairs?

    1. Doji pattern works for all forex pairs, stocks, futures, ETFs. This pattern simply tells that the market is indecisive as neither the bulls nor the bears could win. The open price and the close price are almost equal in a Doji pattern meaning bulls tried to take the price high but then bears intervened and there was an intense struggle and no one could win.

Comments are closed.