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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 Bullish Doji Star

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Market
Industrials (^DJI):
Transports (^DJT):
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Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 09/20/2017
22,413 41.79 0.2%
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732 -5.08 -0.7%
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Tom's Targets    Overview: 09/14/2017
22,450 or 21,500 by 10/01/2017
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775 or 730 by 10/01/2017
6,650 or 6,200 by 10/01/2017
2,600 or 2,425 by 10/01/2017

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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Like its sister, the bearish doji star, the bullish version does not perform in reality as it is supposed to in theory. Theory says that the bullish doji star is a bullish reversal, but my tests show that it acts as a bearish continuation pattern 64% of the time, or almost 2 out of every 3 trades. The 64% number is misleading though. Why? Because a reversal or continuation is dependent on the breakout direction. A breakout occurs when price closes either above the top or below the bottom of the candlestick pattern. With a bullish doji star, price is almost at the low, so a small downward move would signal a continuation of the existing downtrend. That is much easier to achieve than is an upward breakout.

Bullish Doji Star Important Results

Theoretical performance: Bullish reversal
Tested performance: Bearish continuation 64% of the time
Frequency rank: 53
Overall performance rank: 49
Best percentage meeting price target: 59% (bull market, up breakout)
Best average move in 10 days: 5.46% (bear market, up breakout)
Best 10-day performance rank: 9 (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 bullish doji star candlestick
Bullish Doji Star
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Bullish Doji Star Discussion

As I mentioned in the introduction, the bullish doji star acts as a continuation of the existing price trend 64% of the time. This is most likely because price is situated near the bottom of the pattern, making a downward breakout likely. When price does break out, the trend ranks 49th, or mid list, so it is not a star performer either. In other words, do not expect the downward trend to last for long. The frequency rank, at 53, is almost mid way from 1 to 103 candlestick types, so you should be able to located examples of the bullish doji star often.

The best average move 10 days after the breakout is 5.46% after an upward breakout in a bear market. A good move would be 6%, so this comes close. The best performance rank 10 days after the breakout is 9 after an upward breakout in a bull market. That is a very high rating.

Bullish Doji Star Identification Guidelines

CharacteristicDiscussion
Number of candle linesTwo.
Price trend leading to the patternDownward
ConfigurationLook for a tall black candle on the first day followed by a doji (where the opening and closing prices are within pennies of each other) that gaps below the prior candle's body. The shadows can overlap, but the doji's shadows should not be unusually long, whatever that means.
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Three Trading Tidbits for Bullish Doji Star

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

  1. Bullish doji star candles that appear within a third of the yearly low perform best -- page 279.
  2. Select tall candles -- page 279.
  3. Support and resistance zones are important to the bullish doji star -- page 281.

Bullish Doji Star Example

The bullish doji star candlestick on the daily scale

Shown circled in red on the daily chart is a bullish doji star. Even though price climbs for a few days after the candlestick pattern ends, the breakout is still downward, resuming the falling trend already underway. This bullish doji star is not bullish at all, but bearish like most of the bullish doji star patterns.

The first day of the bullish doji star is a tall black candle followed by a doji whose body gaps below the prior body. That means the closing price on the black candle is above the opening price of the doji. The shadows can overlap and they do in this example. The shadow length on the doji is not unusually long, but that is a touchy-feely thing. Clearly they are not like the shadows on a high wave candle or a rickshaw man.

The breakout is downward when price closes below the lowest low posted in the two-day candle, so this one acts as a continuation of the downtrend.

-- Thomas Bulkowski

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Other Bullish Doji Star Examples

See Also

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. Motorcycle bumper sticker: If you can read this, my wife fell off!