Dojicandles are a great indication of indecisiveness in the market, and depending on when they occur can indicate upcomingvolatilityor even a trend reversal! The candles can be identified by their small bodies (distance between open and close price) and long top and bottom wicks (the candle high and lows).
The simplicity of this package ensures traders of all levels of expertise can utilise this tool and experience its benefits to the fullest. Outside of user preference and customisation options, the only variable that alters package performance is the ‘Sensitivity’ option, which dictates how frequently. Dojicandles will be detected based on how the candles are formed. A value of 10 indicates more lenient classification of Dojicandles, where a value of 1 requires a perfect Dojiformation before signalling!
The other options available for your alteration are:
The visibility of the variable levels of support and resistance, which are calculated using a variation of the ATR indicator to gauge asset volatility, as well as price action pivot points to indicate where trader interest may be.
Trend reversal labels for both potentially ‘Weak’ and ‘Strong’ reversals. These labels are created based on how price reacts to the varying levels of support and resistance, as well as the candlestick pattern and formation around those crucial levels.
The default settings are the best settings we’ve found so far but you can change them to build your own unique trading strategy. We’d recommend experimenting with these values to find the best results for the asset you are trading, and your own personal trading and investing style.
Direction for use:
1. Use on any asset class and time frame.
2. Fine tune the DojiSensitivity variable.
3. Be cautious of upcoming volatility after a Dojisignal, especially if the signal occurs near the support and resistancelevels or after a large move, which could indicate a trend reversal.
4. Watch for Reversal signals, which can provide confluence with the Dojisignals and give an early indication that price may soon start moving in the opposite direction.
As mentioned previously, this is a candlestickdetection system that dynamically operates to function with superior accuracy regardless of what you’re trading. But with the level of customisation available, this can easily be fine tuned to accommodate scalping, reversal trading, or even long term investing.