Doji is on of those candle formations, that can't really tell you anything about price direction. However candle following the doji star, can sometimes give you very accurate signal. This signal is a base for this forex strategy. Alligator forex indicator is used as a trend identification method.
Used forex indicators
Alligator forex indicator (default settings)
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Forex strategy rules
Timeframe 1 H. Any currency pair (preferably majors).
BUY:
Alligator lines are visibly separated and lined according to uptrend. From top to bottom: green, red, blue.
Doji star is followed by strong bullish candle, closing above high of doji. These two candles are our signal formation. We enter our buy trade on bullish candle close.
Stop loss is placed below the low of the formation. (Doji + bullish candle)
Take profit: double the distance between entry and low if the formation. After the price travels half the distance to take profit we move our stop loss to break even and wait for trade completion.
SELL:
Alligator lines are visibly separated and lined according to downtrend. From top to bottom: blue, red, green
Doji star is followed by strong bearish candle, closing below low of doji. These two candles are our signal formation. We enter our sell trade on bearish candle close.
Stop loss is placed above the high of the formation. (Doji + bullish candle)
Take profit: double the distance between entry and high if the formation. After the price travels half the distance to take profit we move our stop loss to break even and wait for trade completion.
