$PENDLE HOW TO TRADE A DOJI CANDLE

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Let's understand this interesting method taking the example of PENDLE and how you can maximize your profits on the occurrence of such a candle.

A doji represents an equilibrium between supply and demand, a tug of war neither the bulls nor the bears are winning.

📉 In Pendle the situation shows downtrend where the bears have won previous battles because price has moved down. Now the outcome of the latest skirmish is in doubt.

📈 Now we have a long legged doji on the daily chart, typically casting a large upper wick (shadow) & a close below midpoint. Here the psychology is simple which says prices moved far higher on the day but then profit booking kicked in.

So we take note of the candle's closing & move to a lower time. On the 15 min chart the arrow represents the first candle of the day. Usually after the formation of a doji candle on the higher time frame can lead to a sideways movement on the lower time. Hence we wait and watch the consolidation marking the S/R levels forming that box.

The moment of truth: Price pierced through resistance and you get in. Right!!

⛔ ABSOLUTELY NO ⛔

Let that breakout candle retest the price and hit that resistance again. Usually in such scenarios multiple retests are seen as the price action gets choppy. So wait for the price to hit that level again and when it rebounds from resistance you're good to go. The best entry is above the closing of the doji candle which in this case is $3.68. I won't mind entering above $3.70 either. And there you go 💥🚀

The same can be applied on the opposite when a doji appears after a long uptrend and that signals a good opportunity to short.

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