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Bullish and Bearish Tri-Star Doji Candlestick Patterns Explained- (Trading Strategy and Backtest | Definition & Meaning)

Last Updated on 10 February, 2024 by Trading System

Candlestick patterns are some of the most popular ways to analyze the movements of a market. Two such candlestick patterns are the bullish and bearish tri-star doji patterns.

A tri-star Doji is a three candle reversal pattern that forms at the end of a trend. As its name suggests, it consists of three Dojis which create a triangular pattern after which the market is anticipated to turn in the opposite direction of the main trend.

In this guide to the tri-star Doji, we’ll have a look at not only the definition and meaning of the pattern but also some powerful techniques that can be used to enhance its accuracy.

As you might have noticed, a tri-star Doji can be both bearish and bullish. The only differences are the direction of the preceding trend, and that they are inverted versions of each other.

This article will cover both!

Let’s begin!

Bullish and Bearish Tri-Star Doji Definition

Here is how you define the bullish and bearish tri-star dojis.

Bearish Tri-Star Doji

Tri-Star Doji Candlestick Pattern
Tri-Star Doji Candlestick Pattern

A bearish tri-star doji has to meet the following criteria:

  1. The trend must be bullish
  2. All three candles are dojis
  3. The second candle performs a positive gap
  4. The third candle performs a negative gap.

Bullish Tri-Star Doji

A bullish doji star has to meet the following criteria:

  1. The trend must be bearish
  2. All three candles are dojis
  3. The second candle performs a negative gap
  4. The third candle gaps up

The traditional interpretation is that a bullish tri-star doji signals that a bearish trend may have come to an end, while the opposite applies to a bearish tri doji star

Bullish and Bearish Tri-Star Doji Meaning

All candlestick patterns are unique, and quite naturally represent different moods and movements in a market. Following this, we may be able to extract quite a lot of information about the general state of the market, from watching different candlestick patterns.

Of course, it’s close to impossible to draw a very accurate conclusion about what a market has done at any given moment. Still, watching market data more closely is a great way to hatch new trading ideas, and it’s something we do a lot ourselves.

Let’s see what the tri-star doji may tell us about the market. We’ll use a bullish tri-star doji in this example, but the opposite applies to a bearish tri-star doji!

As the market comes from a bearish trend, most market participants are negative and expect prices to continue dropping.

However, soon some market players become hesitant. The market has been going down for quite some time by know, which means that it inevitably is becoming more probable that a trend reversal or pullback is drawing closer.

Following this fear, the market forms the first doji of the tri-star doji pattern. The next day continues in the same direction, and end as another doji, this time gapping down from the previous close, showing that bears still dominate.

The third candle continues to indicate that buying and selling pressure is equally strong. However, the fact that it gapped up this time shows that bears are starting to lose control to the bullish forces of the market.

Tri-Star Doji Examples

Here follow two examples of the bullish and bearish tri-star doji patterns:

Bearish Tri Star Doji
Bearish tri-star Doji
Bullish Doji Tri Star
Bullish tri-star doji

How to Trade the Bullish and Bearish Tri-Star Doji

When some beginning traders learn about patterns like the tri-star doji, they dive headfirst into the markets, attempting to spot and act on the pattern they’ve just learned.

However, more experienced traders know that you shouldn’t trade candlestick patterns without ensuring that other types of technical analysis confirm the pattern.

Now, in the following section, we’re going to cover two powerful methods that ensure that you’re only taking trades that probably end as winners. These are methods we use ourselves and have had great experiences with.

Just remember that you need to apply the filters to the right time frame and market for them to work properly. The best market and timeframe for your particular setup is best determined with backtesting!

Having said this, let’s have a look at two powerful categories of filters!

Related reading: What Does Doji Candlestick Mean? Is it bullish or bearish?

Volume Filters

When you look at a price chart, you get a clear visual impression of the market and its movement. However, what you don’t see, is the conviction of the market, meaning the number of fulfilled orders that backed the move.

With volume data, you get to see the conviction behind a move, in terms of the number of traded contracts or shares. In many cases, high volume means that a certain move is more significant since more or bigger market players stood behind it.

Now, when we use volume we like to use the following conditions:

  1. Volume is greater or lower than the volume of the previous bar
  2. Volume is at its highest or lowest level x bars back.
  3. Volume is above or below the moving average of volume

While these are conditions that would work with most types of patterns or strategies, you definitely could try to adapt the rules to the anatomy of the tri-star doji pattern.

For example, you might want to demand that the second candle is formed with significantly more volume than the first and second candles. This would suggest that we’ve witnessed a so-called volume blowoff, which often occurs at the end of a trend!


Bullish and Bearish Tri-Star Doji Candlestick Patterns Explained- (Trading Strategy and Backtest | Definition & Meaning)


You may also want to consider when the tri-star doji is formed. Different markets have varying seasonal and time-based tendencies, meaning that they tend to be more bullish or bearish at certain times.

If you know when a market tends to be more bullish or bearish, you could use it as confirmation. For example, if a bullish tri-star doji forms in a period of the month when the market tends to become more bullish, it would match quite well with the pattern, and make us confident that it’s worth acting on.

Here are some of our favorite ways to apply seasonality:

Month: Are there any months when your market has a strong bullish or bearish inclination?

Day of the Month: We like to divide the month into two or three parts, and see if we find any significant differences

Day of the week: Some markets have some days when they’re more bullish or bearish

Time of day: Some patterns may only work during the first or second half of the day

Bullish and Bearish Tri-Star Doji Trading Strategies

Having covered how to improve the tri-star doji pattern for live trading, we wanted to show you some example trading strategies that use the pattern.

As with everything we’ve shown you so far, you shouldn’t take the strategies below as copy-paste solutions. Instead, think of them as inspiration for your own trading strategies!

Let’s have a look at them!

Trading Strategy 1: Bullish Tri-Star Doji and Gap Condition

The fact that a gap occurs not only once, but twice makes it a significant part of the pattern, and something we might want to pay closer attention to.

More specifically, we might want to measure the size of the gaps and require that they’re of significant size, before we go long. And that’s what we’ll do in this trading strategy, with some help from the average true range indicator.

Put simply, we’ll require that both gaps are bigger than the average true range to act on a bullish tri-star doji.

In other words, we go long if:

  1. There is a bullish tri-star doji
  2. Both gaps are bigger than the average true range

For the exit, we’ll just wait for 5 bars to get out of the trade.

Bullish Tri Star Strategy
Bullish tri-star Strategy

Trading Strategy 2: Bearish Tri-Star Doji and Oversold Readings

In markets like stocks and equities, it’s common that you see price swings where the market moves too much in one direction and then reverts. This behavior is referred to as mean reversion .

There are many ways you can measure when the market is likely to revert, but one of our favorite methods is high RSI readings.

RSI is a trading indicator that outputs readings between 1-100, where everything above 70 is considered a sign of an overbought market. Following this, the strategy example will require an RSI-reading of 70 or more to enter a trade

In other words, we short the market if:

  1. We have a bearish tri-star doji
  2. RSI is above 70

Then we exit the trade after RSI crosses below 50.

Bearish Tri Star Doji Trading Strategy
Bearish tri-star Doji Trading Strategy

Ending Words

In this guide to the bearish and bullish tri-star dojis you’ve learned how to identify the patterns and their meanings. In addition to that, we’ve also covered some powerful concepts that you can use to filter out bad trades.

As a final piece of advice, we urge you not to trade anything you haven’t tested yourself yet! Unfortunately, most technical analysis out there doesn’t work, and to not lose your money trading it, you’ll have to learn how to validate and create your own strategy.

Here you can find our Candlestick pattern archive with many articles covering the subject.


What is a Tri-Star Doji Candlestick Pattern?

A tri-star doji is a three-candle reversal pattern that typically appears at the end of a trend. It consists of three consecutive doji candles, forming a triangular pattern. The market is anticipated to reverse its direction after the formation of a tri-star doji.

How to Trade the Bullish and Bearish Tri-Star Doji Effectively?

It’s essential to confirm tri-star doji patterns with additional technical analysis. Volume filters, considering volume levels in relation to previous bars, and analyzing seasonality (market tendencies at specific times) can enhance the accuracy of your trades.

Why is Seasonality & Volume Important in Tri-Star Doji Trading?

Different markets have seasonal tendencies. Considering factors like months, days of the month, days of the week, or times of the day when a market tends to be bullish or bearish can provide confirmation for tri-star doji patterns. Volume reflects the conviction behind market moves. High volume can signify more significant moves. In tri-star doji trading, consider conditions like volume greater or lower than the previous bar, volume at highest or lowest levels, or volume above or below the moving average.

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