A three-lock checklist for doji, gap, and stochastic reversals

Three locks, one hypothesis

After a prolonged directional move, a doji is described as an equilibrium or indecision print that can mark a potential end of that move. The open and close sit at or near the same level, which is read as a pause in directional control after a trend.

TradersWeek editorial reading: treat that pause as the first lock only. A doji asks whether control has stalled. It does not, on its own, say that the next side has taken the market.

What the doji is allowed to claim

A doji at the top of an extended advance in an overbought zone is treated as an exit alert. A doji at the bottom of an extended decline is treated as incomplete until the next session shows buying.

Confirmation is the next-session print that either supports or rejects the doji's reversal hypothesis. The archive gives special weight to a gap in the new direction.

The gap, or window, as urgency

A gap, also called a window, is defined as a session that opens beyond the prior session's full range. That unused price space on the chart is used as a sign that the new direction is being pursued with urgency.

A doji during a long decline followed by a gap higher the next session is presented as two-step confirmation that selling has paused and buyers have entered.

TradersWeek editorial reading: the gap is the second lock. It answers whether the next side is urgent, not whether the doji already finished the reversal.

Stretch context from the stochastic oscillator

Stochastic readings below 20 and above 80 are used as oversold and overbought context that can corroborate a doji-plus-gap reversal reading. The oscillator is a bounded reading of recent closes versus the local high-low range, used here only as stretch context.

A reading below 20 is treated as stretched selling rather than a standalone entry. A reading above 80 is treated as stretched buying rather than a standalone exit.

TradersWeek editorial reading: the oscillator extreme is the third lock. It tests whether the prior move was already stretched before the doji and the gap appeared.

One combined hypothesis

Bottom examples pair a doji or doji-harami with a later gap higher and a follow-through up session. The top example pairs a doji with a gap lower when the oscillator is already elevated.

The joint occurrence of an oscillator extreme, a candlestick reversal print, and a confirming gap is framed as one combined hypothesis rather than three independent signals.

TradersWeek editorial reading: if any lock fails, the combined hypothesis is no longer live.