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Candlestick day trading is one of the most simple trading strategies used in the currency market. By simple we don’t actually mean easy. As with any trading strategy, a noob can’t jump in and expect to earn money right away. There’s always risk. It is still important to practice the technique in a demo account and become acquainted with all of its swings and roundabouts.  

Using the candlestick chart roughly on its own is simple as the trader isn’t required to analyze a huge quantity of info before making a trade. This is a massive advantage in day trading when decisions have to be made quickly . Often a complicated system will trip up a trader who becomes impatient with all the indicators that must be cross checked. He cuts corners and ends up shorting out his system, resulting in losses. It is common to blame the trader in this scenario but the system can be criticised too. A complex system is not well suited to forex day trading.

Doji reversal can provide one simple candlestick day trading system. A doji is a candle which has no body, as the open and close prices are the same. In fact it does not look like a candle at all, but like a cross.

A doji is often an indication of indecisiveness or reversal in the market. In a volatile market without strong trends or identifiable patterns, the doji will be common and not particularly important.

However, it is during either an upward or a downward trend that the doji can be significant for candlestick day trading strategies. In this situation , the doji is often a sign that a retracement could be about to happen, or maybe a full reversal of the trend. In an uptrend it means that purchasers are losing confidence. In a downtrend, that sellers are losing confidence.

When you see a doji forming in a trending market, it is always worth checking against an oscillator such as the RSI (relative strength index) or MACD ( moving average convergence / divergence ) to discover whether the price is in the overbought or oversold range. If it isn’t, then the doji might not be important. However, if the indicators do imply an overbought or oversold market, a doji could be a signal to become involved.

It’s also feasible to use the candlestick chart itself for support for the idea of a doji reversal. Check if it is roughly in line with current support or resistance bands. The volume of trading in the currency pair could also be major. The quantity of currency traded is probably going to be tailing off if a reversal is getting ready to happen. This is a measure taken from candlestick day trading in the market that’s little utilized in foreign exchange and could provide an edge.