Doji Candle Explained by Trading Coach Jo

A Doji candle has a small body with a long upper wick and long lower wick. Long means longer than the length of the body of the candle. Below is an example of what a typical Doji candle looks like.

A recent client of Trading Coach Jo, recognized a Doji, but did not understand how to interpret this potential signal. Following is my simplified explanation:

After identifying a Doji, the most significant thing is to note where this Doji occurs on the chart. If a Doji appears at support or resistance, it could mean a reversal. I suggest that you wait for the next candle to confirm a change in direction.

If a Doji appears other than at support or resistance, it simply signifies indecision. You will notice that a stock that is stagnant in a horizontal channel, may have several Dojis with a short time period – all showing that the stock does not know which way it intends to move.

Be sure to watch for Doji candles at support and resistance. Noticing this pattern can give you advance notice of a pending move in the opposite direction.

Here’s to your option trading success,

Coach Jo

Options Trading Coach Jo Explains Support

Most clients of Options Trading Coach Jo struggle with support. Support is an area rather than an exact magical number.

A strong support area is an area that the stock has frequently gone down to and either pops back up or hangs out at that area until it eventually pops back up. The more times that the support area is hit, then goes back up, the stronger the support area.

Traders that look at a chart can easily see the support area. In fact, they may make the decision or tell their broker to buy the stock once it hits the support area and starts back up. Many traders seeing this same pattern will make the same decisions to buy at support. Due to this high volume of buying, the stock price will raise and continue to raise as more traders see the stock bounce up from support.

Support can be a horizontal area, an ascending area or a descending area. Pay attention to these support areas. Start by drawing lines on your chart where you see a support area.

Determine support areas for 3 stocks by drawing lines on their charts. Watch to see if the stock respects the support area and bounces off and back up.

Of course, the support area can be broken. In this case, watch for the next lower support area and watch to see if your stock respects the new support area.

Determining support can be seen as an art rather than a science. Train your eyes to see support areas and your trading profits will greatly be improved.

Here’s to you,

Coach Jo

Coach for Stock Options – Hammer Candle Pattern VIDEO

One of the first candle patterns that I teach my stock option trading clients is the Hammer. This candle pattern can be used for downtrends as a reversal of direction to an uptrend. Please check out my short video below where I give examples of what a hammer is and when it is giving a significant signal because it combines with Western technicals.

Cheers,

Coach Jo

Stock Chart Types VIDEO – Stock Option Trading Coach for Beginners

Hello – I made  a video for you that I hope will more clearly explain about the stock chart types – bar, candle and line. Let me know what you think.

Jo

PS Please click on the title of this post and it will open without the “categories” interfering. Once opened, click on the lower right icon to get the video to play full screen. I will work on my website format!