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Bearish Doji Star Candle Pattern
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
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. |  Bearish Doji Star |
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. |
Bearish Doji Star: Three Trading Tidbits
- 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.
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