Trading Traps
Doji in Chop
A doji pattern appearing in a ranging, choppy market
A doji in chop refers to doji candles appearing in sideways, range-bound markets. While dojis normally signal indecision that may lead to reversal, in choppy markets they are just noise and have no predictive value.
✓How to Recognize
- •Market is range-bound (RANGE regime)
- •Multiple dojis appearing without follow-through
- •No clear trend direction
- •Price bouncing between support and resistance
⚡How to Avoid
- →Identify market regime before trading patterns
- →Don't trade reversal patterns in ranges
- →Wait for regime change to trending
- →Focus on range trading strategies instead