Doji Stars

A Doji Star is a type of candlestick pattern that can signal a potential reversal in price direction. It can be either bullish or bearish depending on its placement in the existing trend and the nature of the candles that follow it.

Bullish Doji Star

This pattern occurs during a downtrend and signifies a potential bullish reversal. The first candle in this pattern is a long bearish (red or black) candlestick, which is followed by a Doji — a candlestick where the opening and closing prices are virtually the same, resulting in a very small body. The Doji should gap lower than the first candlestick, and it indicates market indecision. If the following candle is a large bullish (green or white) candlestick that closes above the midpoint of the first candlestick, it confirms the bullish reversal, and the pattern is known as a Morning Doji Star.

Bearish Doji Star

This pattern occurs during an uptrend and signals a potential bearish reversal. The first candlestick is a long bullish (green or white) candlestick, followed by a Doji that gaps higher than the first candlestick. Again, the Doji represents indecision in the market. If the next candlestick is a long bearish (red or black) one that closes below the midpoint of the first candlestick, it confirms the bearish reversal, and the pattern is known as an Evening Doji Star.

Remember, as with all candlestick patterns, it's important to consider additional indicators and factors to confirm the potential reversal. These can include other technical indicators, volume data, or even broader market trends.