If the two sides have a conflict of interest, which side will you choose to benefit you the most? Of course, it should be the winner when the war is over. It is also seen as a simple way to make a profit in trading. Therefore, in this article, I will reveal tips for effectively making a profit in realizing whether the fight’s outcome will favor the bulls (buyers) or the bears (sellers) through the Doji candlesticks with very special shapes.
- 1 The Doji candlestick is a signal of struggle
- 2 How to make a profit effectively with a Dragonfly Doji candlestick
- 3 How to make a profit safely with a Gravestone Doji candlestick
- 4 Good risk management makes it easy for traders to make the desired profit
- 5 The combination of Doji candlesticks and technical indicators can increase the safety of trading orders
- 6 Review on how to make a profit with Dragonfly Doji candlesticks and Gravestone Doji candlesticks in Olymp Trade
- 7 To conclude
The Doji candlestick is a signal of struggle
A Doji candlestick is a candlestick pattern that represents an indecisive crowd in the market. It can be used for both up and down markets. However, the Doji candlestick pattern has many variations and each variation has a different characteristic. This can lead to misconceptions if you do not fully understand.
Normal Doji candlestick patterns will give no sign of anything special other than a struggle. Therefore, we only need to pay attention to two special-looking candlestick patterns: Dragonfly Doji and Gravestone Doji.
How to make a profit effectively with a Dragonfly Doji candlestick
Dragonfly Doji: This is a Doji candlestick with a very long lower tail, but (almost) without an upper tail. Opening price = Closing price = Highest price. Looking at the Japanese candlestick chart, it is very much like a dragonfly.
That is the definition, but how to use it effectively is what you need to pay attention to. Obviously, you must have known that opening orders following the trend will be easier to make profits than going against it. Therefore, I will also instruct you to use Dragonfly Doji to open orders during an uptrend.
When the market is bullish, the appearance of a Dragonfly Doji candlestick is a signal that the sellers have failed to push the price lower. The inability of the “bears” is clearly shown at the lower tail of the candle. Then, an UP position will be the safest option for investors.
Or else, it can also signal a reversal in a certain price range.
How to make a profit safely with a Gravestone Doji candlestick
Gravestone Doji is a candlestick with a very long upper tail, but (almost) without a lower tail. Opening price = Closing price = Lowest price. The name may sound creepy because it is like a gravestone.
If you want to use the Gravestone Doji most effectively, you should use them in a clear downtrend. Because at times of market decline, the Gravestone Doji candlestick serves as a signal that the downside momentum will continue in the future.
Or you can also see the Gravestone Doji candlestick as a signal that predicts a reversal from bullish to bearish. It is certain that the price will not be able to continue rising once we encounter this candlestick at the level (resistance). You can see that through the upper tail of the Gravestone Doji candlestick.
Good risk management makes it easy for traders to make the desired profit
How weird! Why can splitting money for trading help increase profits? Do not question such things. Because right here, we are going to address 2 reasons to help you keep your money safe. That will explain how profits will be generated.
What if the risks you face are controlled on a daily basis? I’m sure no matter how bad the outcome happens, the loss amount won’t go beyond the frame you have set.
For example, professional Fixed Time Trade traders often risk 2% of their total capital per order. They will stop trading for the day when the loss reaches 10% of the total account balance.
Investors with a specific capital management plan like this are sure to get profits in the long term. They never bet all the money in their account with a single bet. This is something that new traders often experience leading to prolonged losses.
Increase efficiency in the transaction process
Risk management is like a record file that keeps track of your transactions in the past. The more you pay attention to analyzing the results, the more opportunities you have to improve your trading strategy.
That is the secret of the “holy grail” in trading that you have been searching for a long time. Don’t waste your time looking for an unbeatable trading strategy. You can improve your trading strategy by paying attention to capital management.
The combination of Doji candlesticks and technical indicators can increase the safety of trading orders
If you want to have quick trades without missing any opportunities, you can open orders with Dragonfly Doji candlesticks or Gravestone Doji candlesticks only. However, it will not offer a high degree of safety when the conditions for opening an order are too easy. To overcome that, you need to combine with it technical indicators to increase accuracy.
Between continuous entry with a low probability of winning and high precision selective trading, which option will you prefer? Certainly, you should focus on the quality of the transaction rather than the quantity when considering Olymp Trade as an investment channel.
The theory behind creating a perfect trading strategy has been presented. The next thing you need to do is to practice on a Demo account as smoothly as possible. It is better to sweat on the sports field so that when going to the battlefield, less blood will be shed. Only after getting positive results should you think about making a profit with special Doji candlesticks.
Review on how to make a profit with Dragonfly Doji candlesticks and Gravestone Doji candlesticks in Olymp Trade
Trading currency pair: EUR/USD
Balanced investment: $500 each
1st order: At the EUR/USD currency pair on April 5, the price formed an uptrend. The price retested the support zone and the entry signal was a Dragonfly Doji candlestick. Opened an UP order following the trend with an expiration time of 30 minutes.
2nd order: On April 6, at the EUR/USD, the Bollinger Bands indicator provided a bullish entry signal. At the same time, a Dragonfly Doji candlestick with the entire lower tail outside the lower band appeared. It was safe enough to open an UP order predicting the price would rise again with an expiration time of 30 minutes.
3rd order: In an uptrend on April 7, there were plenty of good opportunities for you to open a trend-following order. And the entry signal appeared as a Dragonfly Doji candlestick, which touched the support zone and rebounded. Right there, opened an UP order with a 30-minute expiration time.
4th order: On April 7, the currency pair was in a stable uptrend. Then the price slowed to form a resistance level. Right there, the entry signal for an order with an expiration time of 30 minutes was a Gravestone Doji candlestick appearing at the previous resistance zone.
4 orders opened during the week from April 5 to April 9 resulted in 3 wins and 1 loss. This brought a decent profit with a very effective trading strategy using special Doji candlesticks. It offers an extremely high win rate of up to 75%. Is it worth your attention?
If yes, please test this trading strategy using the Doji candlestick on a Demo account first. There have been many people who lose money when they do not fully understand the strategy they are using. Do not go into that wreckage, but be careful to learn clearly before applying it to the real battle.