CDLDOJISTAR (CDLDOJISTAR)

CDLDOJISTAR (Doji Star) is a two-candle reversal pattern combining a strong directional candle with a gapping Doji. For bullish Doji Star: First candle is a long bearish candle in a downtrend. Second candle is a Doji that gaps down (opens below the first candle's close), showing initial continuation weakness, but the Doji's indecision indicates bears are losing conviction despite the gap down. For bearish Doji Star: First candle is bullish in an uptrend, second is a Doji that gaps up but shows indecision. The gap shows attempted continuation, but the Doji reveals that momentum has stalled at the extreme, suggesting a potential reversal. It's essentially the first two candles of a Morning Star or Evening Star pattern.

Doji Star patterns signal potential reversal but are considered moderate-strength signals that require confirmation by a third candle. The pattern shows that a gap continuation attempt resulted in indecision, suggesting trend exhaustion. For bullish Doji Stars at bottoms, wait for the next candle to close above the Doji to confirm the reversal before entering long. For bearish Doji Stars at tops, wait for the next candle to close below the Doji before shorting. When confirmed, the pattern essentially becomes Morning Star or Evening Star (both highly reliable). Most effective at established support/resistance levels after extended trends. Combine with RSI at extremes (<30 for bullish, >70 for bearish), MACD showing divergence, and volume analysis. The pattern is common in crypto markets and serves as a good early warning that a trend may be exhausting, giving traders time to tighten stops or prepare for reversal entries.