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Southern Doji Candle Pattern
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 Candlestick: 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. |  Southern Doji |
Southern Doji Candlestick: 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 Candlestick: Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | One. |
| Price trend leading to the pattern | Downward. |
| Configuration | Look for a doji candlestick (one in which the opening and closing prices are a few pennies from each other) in a downward price trend. |
Southern Doji Candlestick: 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.
- Southern doji candles that appear within a third of the yearly low perform best — page 260.
- Southern doji candles with shadows taller than the median outperform — page 261.
- Southern doji within a third of the yearly high tend to act as reversals — page 262.
Southern Doji Candlestick: Example
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).
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