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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 Southern Doji

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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 11/22/2017
23,526 -64.65 -0.3%
9,627 11.94 0.1%
758 -0.24 0.0%
6,867 4.88 0.1%
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Tom's Targets    Overview: 11/14/2017
23,700 or 22,800 by 12/01/2017
9,300 or 9,800 by 12/01/2017
800 or 750 by 12/01/2017
7,000 or 6,500 by 12/01/2017
2,625 or 2,540 by 12/01/2017

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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The southern doji is supposed to act as a bullish reversal candlestick, and it does, but just 52% of the time. I call that "near random." If you found one charging at you while on safari, you would not know which way to turn. Most doji candlesticks that I have studied are just like that: They act randomly.

Southern Doji: Important Results

Theoretical performance: Bullish reversal
Tested performance: Bullish reversal 52% of the time
Frequency rank: 8
Overall performance rank: 78
Best percentage meeting price target: 90% (bull market, up breakout)
Best average move in 10 days: 3.51% (bear market, up breakout)
Best 10-day performance rank: 50 (bear 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 southern doji candlestick
Southern Doji
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Southern Doji: Discussion

Theory matches the performance found in the field: the southern doji acts as a bullish reversal but only 52% of the time. Based on the frequency rank (8), you will find it often in a historical price trend, but performance after the breakout ranks well down the list of performers: 78. Since I only looked at 103 candlesticks, with 1 being best, the southern doji is not one worth hunting for.

After the breakout, price meets the measure rule target 90% of the time. That means if you add the height to the top of the doji, price will reach it 90% of the time before the trend ends. That is a good score but it only applies to upward breakouts in a bear market. The best average rise is 3.51% over 10 days which I consider poor. Rises of 6% or more get me hot!

Southern Doji: Identification Guidelines

CharacteristicDiscussion
Number of candle linesOne.
Price trend leading to the patternDownward.
ConfigurationLook for a doji candlestick (one in which the opening and closing prices are a few pennies from each other) in a downward price trend.
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Southern Doji: Three Trading Tidbits

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. Southern doji candles that appear within a third of the yearly low perform best -- page 260.
  2. Southern doji candles with shadows taller than the median outperform -- page 261.
  3. Southern doji within a third of the yearly high tend to act as reversals -- page 262.

Southern Doji: Example

The southern doji candlestick on the daily scale

Shown is a southern doji (A) on the daily chart. This doji has the opening and closing prices the same and it appears in a downward price trend -- all the ingredients to qualify it as a southern doji. Price reverses trend when it breaks out upward (a close above the top of the doji).

-- 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. The trouble with the gene pool is that there's no lifeguard.