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Definition

 

The white candle is followed by a short candle, a Spinning Top, a Highwave, or a Doji with a gap in the trend’s direction. This is the Bearish Doji Star pattern.

  • Trend: Reversal
  • Expected trend: Bearish
  • Previous trend: Bullish
  • Reliability: High
  • Type: Bearish
  • Number: 2

Recognition

  • The market is in an upward trend.
  • The first day is a long white candle.
  • The second day is either a short candle, a Spinning Top, a Highwave, or a Doji with a gap in the trend’s direction.
  • The shadows of the second day’s candle must be short.

Interpretation

The first day strengthens the current ascending trend. The trading starts with an upward gap on the next day, but the trading range remains narrow and a Doji is formed. The Doji reflects the uncertainty of the market participants and the trend seems to come to a halt. The third day can confirm the reversal, if the share opens lower and closes near the daily minimum.

Important factors

To make sure the trend is continued, a confirmation on the third day is needed. The confirmation could come from a black candle with a downward gap or a lower closing price.