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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Collapsing Doji Star

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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 03/27/2017
20,551 -45.74 -0.2%
8,935 6.33 0.1%
702 -3.50 -0.5%
5,840 11.63 0.2%
2,342 -2.39 -0.1%
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Tom's Targets    Overview: 03/14/2017
20,100 or 21,250 by 04/15/2017
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675 or 715 by 04/01/2017
5,950 or 5,650 by 04/15/2017
2,275 or 2,425 by 04/15/2017
Mutt Losers: None YTD
Mutt Winners: None YTD

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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The collapsing doji star is a very rare bird. I found just 16 of them out of 4.7 million candle lines. Thus, the statistics are subject to change and are unreliable. Those that I did find act as a bearish reversal of the upward price trend, ranking 24th. The overall performance is near the bottom of the list, suggesting that the trend after the breakout is dismal. Do not expect price to trend for long.

Collapsing Doji Star Important Results

Theoretical performance: Bearish reversal
Tested performance: Bearish reversal 63% of the time
Frequency rank: 101
Overall performance rank: 97
Best percentage meeting price target: 60% (bull market, down breakout)
Best average move in 10 days: 7.32% (bull market, up breakout)
Best 10-day performance rank: 24 (bull market, up breakout)

All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts.

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

The ideal collapsing doji star candlestick
Collapsing Doji Star
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Collapsing Doji Star Discussion

As I mentioned in the introduction, the collapsing doji star is rare. If you use the one minute scale, you would have one appear on your screen every 3.3 years. My guess is you would probably be asleep at your keyboard by then and miss it anyway.

The collapsing doji star acts in theory as it does in reality, as a bearish reversal of the upward price trend 63% of the time. However, the frequency rank is 101 out of 103, so you may never find an example. The overall performance is 97th and that is because I could not find any in patterns in a bear market. That hurt the results.

The best average move 10 days after the breakout is a rise of 7.32% in a bull market. I consider moves of 6% or higher to be good ones, so the 6 patterns that qualified did well. That performance gave the candlestick pattern its best 10-day performance rank of 24th.

Collapsing Doji Star Identification Guidelines

CharacteristicDiscussion
Number of candle linesThree.
Price trend leading to the patternUpward.
ConfigurationLook for a white candle in an upward price trend. Following that, find a doji that gaps below yesterday's low. The last day is a black candle that also gaps below the doji. None of the shadows on the three candles should overlap, so there should be gaps surrounding the doji.
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Collapsing Doji Star Example

The collapsing doji star candlestick on the daily scale

The chart shows the collapsing doji star circled in red on the daily scale. Price moves up to the start of the collapsing doji star when a white candle appears. Below that is the doji and notice that the shadows of either candle do not overlap. The last day is a black candle and again, the shadows do not overlap so the doji appears to float between the candles on either side of it.

Based on the picture, I would say that the stock during this period probably did not trade often or it split so many times that the price differences became minor, removing the shadows from the candlesticks. Perhaps both occurred.

This collapsing doji star candlestick functions as a reversal of the brief up trend when price breaks out downward. A downward breakout happens when price closes below the bottom of the candle pattern. In this example, the downtrend does not last long before price moves horizontally.

-- Thomas Bulkowski

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Look out for #1 and don't step in #2.