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Written and copyright © 2008-2011 by Thomas N. Bulkowski. All rights reserved.
In my book,
Encyclopedia of Candlestick Charts  , pictured on the right,
I explore the entire range of candlestick patterns from abandoned babies to windows (not exactly A to Z, but you get the idea), in both bull and bear markets, using almost 5 million candle lines
in the tests.
The book takes an in-depth look at 103 candlestick patterns and reports on behavior and rank (3 types: reversal rate, frequency, and overall performance), identification guidelines,
performance statistics (tables of general statistics, height, and volume), trading tactics (tables of statistics on reversal rates and performance indicators),
and wraps each chapter with a sample trade. I share a sliver of that information below. If you like what you read here, then you will love the book. Help support this website and buy a copy
by clicking on the above link.
The bearish doji star candlestick is supposed to act as a bearish reversal pattern but doesn't. In fact, it is a wonderful continuation candle because that is what happens to price -- it
continues rising 69% of the time, ranking 8th, where 1 is best. Looking at the candle pattern as it moves from a tall white candlestick, to a doji with a gap between, you would swear that
momentum was slowing. It does, but the numbers suggests it picks up again and price moves higher.
Bearish Doji Star Important Results
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Theoretical performance: Bearish reversal
Tested performance: Bullish continuation 69% of the time
Frequency rank: 43
Overall performance rank: 51
Best percentage meeting price target: 55% (bear market, up breakout)
Best average move in 10 days: -5.77% (bear market, down breakout)
Best 10-day performance rank: 14 (bull market, down 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.
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 Bearish Doji Star
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Bearish Doji Star Discussion
When I saw that 69% performance rate, I was excited until I learned that it was for a continuation pattern and not a reversal. That number is not as good as it sounds because price
is at the top of the candle pattern, in a doji, no less. All price has to do to signal a continuation is close above the top of the doji. That is easy compared to a downward breakout
which would require a close below the bottom of the candlestick pattern.
The overall performance rank is 51 which is mid list. That suggests the trend after the breakout is not a long one.
The frequency rank is 43rd, which means you should be able to find the bearish doji star easily in a historical price series. The best average move 10 days after the breakout is a
drop of 5.77% in a bear market. The drop is close enough to 6%, which I consider to be a good move, that I will not quibble. The best 10-day performance rank is 14 after a downward
breakout in a bull market.
Bearish Doji Star Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | Two. |
| Price trend leading to the pattern | Upward |
| Configuration | Look for a two-candle pattern in an uptrend. The first candle is a long white one. The next day, price gaps higher and the body remains above the prior body. A doji
forms with the opening and closing prices within pennies of each other. The shadows on the doji should be comparatively short. |
Three Trading Tidbits for Bearish 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.
- Bearish doji star candles that appear within a third of the yearly low perform best -- page 268.
- Trade a bearish doji star as part of an upward retracement in a downward price trend -- page 271.
- Volume gives performance clues -- page 270.
Bearish Doji Star Example
Shown in the red circle on the daily chart is a bearish doji star. Price trends upward leading to a tall white candle. The next day, price gaps
open higher (in this case, the gap may only be a penny high) and a doji forms. The length of the shadows on the doji, combined (upper plus lower), should be smaller than the body of the white
candle. In this example, a gravestone doji appears. The combination does little to halt the price rise. The breakout is upward when price closes above the top of the bearish
doji star candlestick pattern.
-- Thomas Bulkowski
Other Bearish Doji Star Examples
Copyright © 2008-2011 by Thomas N. Bulkowski. All rights reserved. Bumper sticker: Don't bother honking or flashing your lights. I'm deaf and blind.
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