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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 Northern Doji

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As of 05/26/2017
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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.

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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Despite the belief that a northern doji is supposed to be a bearish reversal candlestick, it acts as a continuation 51% of the time. That is about random, so do not expect a reversal. The northern doji is just another doji candlestick pattern that means nothing at all even after price is trending upward. The candle appears often, ranking 6th out of 103 candles, where 1 is famous and 103 is unknown. The overall performance rank is well behind the leaders, at 83. Is there nothing redeeming about the northern doji? Let's take a closer look.

Northern Doji Important Results

Theoretical performance: Bearish reversal
Tested performance: Bullish continuation 51% of the time
Frequency rank: 6
Overall performance rank: 83
Best percentage meeting price target: 88% (bull market, up breakout)
Best average move in 10 days: 3.17% (bull market, up breakout)
Best 10-day performance rank: 53 (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 northern doji candlestick
Northern Doji
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Northern Doji Discussion

As I mentioned in the introduction, the northern doji is supposed to act as a bearish reversal, but is a bullish continuation instead. However, the different is slight, just one percentage point. With a frequency rank of 6, you will find them almost as often as sand at a beach. When do you find them, do not expect price to trend long after the breakout. The northern doji ranks 83 for overall performance.

Using the height of the candlestick projected upward or downward from the breakout price (which is the top or bottom of the candle, respectively), price hits the target 88% of the time, which is quite good. The best move is an average rise of 3.17% over 10 days where a 6% or higher move I consider mouthwatering. The best performance rank is 53, and that occurs after an upward breakout in a bull market. That is just mid list, too, so do not get excited.

Northern Doji Identification Guidelines

CharacteristicDiscussion
Number of candle linesOne.
Price trend leading to the patternUpward.
ConfigurationLook for a candle in which the opening and closing prices are within pennies of each other (a doji) in an up trend.
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Three Trading Tidbits for the Northern Doji

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. Northern doji candles that appear within a third of the yearly low perform best -- page 250.
  2. Opening gap confirmation works best -- page 254.
  3. Breakouts below the 50-trading day moving average lead to the best performance -- page 254.

The northern doji candlestick on the daily scale

Northern Doji Example

Shows is a daily chart with a northern doji candlestick at A. Any type of doji qualifies as a northern doji provided it appears in an upward price trend like the one shown here. A doji candlestick has the opening and closing prices within a few pennies of each other. In this case, a long lower shadow would suggest the bulls battled back the bears for possession of the price trend. Nevertheless, the bears won in the coming days when price broke out downward from the candlestick. This northern doji acted as a bearish reversal and went wee, wee, wee, all the way home.

-- Thomas Bulkowski

 

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Other Northern Doji 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. Does the name Pavlov ring a bell?