Doji Trading Strategies – Backtesting and Historical Performance Analysis of a Candlestick Pattern

Doji trading strategies are popular and the doji pattern is one of the most famous candlestick patterns. Candlestick patterns have several “derivatives” and can be used together with other bars. There are at least 64 different candlestick patterns that have been given a name, please read our article about how many candlestick patterns are there?

What is the doji pattern? Can we develop a doji trading strategy? In this article, we backtest a doji strategy on the S&P 500.

Do candlesticks work? Many believe that candlesticks have no predictive value, but our backtests indicate that some of them might be useful. We even wrote an article about 3 bullish candlestick patterns that work.

We use candlesticks as a visual tool on our charts, but so far we have yet to implement them as a stand-alone trading strategy. We use candlesticks as charting simply because they are visually more appealing and they make the chart more “readable”.

But first, let’s start with an explanation of the doji pattern:

List of Doji Trading Strategies

On this page, we have compiled all the trading strategies (investment strategies) we have published since our start in 2012 (plus relevant trading strategy articles). The page contains 200+ free trading strategies plus articles about indicators and trading strategy-specific articles. We are confident you find a viable investment strategies among all these articles.

What is the candlestick pattern called doji?

The doji pattern is mainly classified as a “reversal” pattern, but that doesn’t mean that prices should reverse. It is more correctly viewed as simply the end of a trend. The market has been going in some direction, for example down, and then one day prices finish roughly where they started (the open and the close are more or less at the same price). It is an indication that the bears might be losing control after knocking the in