The candles of the pattern are ringed. An invented chart, drawn to show the shape. Not market data.
Also searched asdoji candle meaning · doji star · long-legged doji · indecision candle
How to recognise a doji
- The body is a thin line: open and close almost equal.
- There is a wick on at least one side, often both.
- It matters more after a clear run up or down than in the middle of a quiet range.
What it is taken to mean
A doji is read as indecision: neither buyers nor sellers finished ahead. After a strong run it is taken as a sign that the run is losing force, not as proof that it is over.
What traders check next
- Where it formed: at a level that has turned the price before, or in open space?
- What the next candle does. A doji is a question; the next close is the answer.
- The time frame. A doji on a one-minute chart is noise; on a daily chart it took a day to form.
Where people go wrong
- Treating every doji as a reversal. Most are followed by more of the same.
- Acting before the candle has closed. Until it closes, it is not a doji.
- Ignoring the spread: on a very short time frame the body may be smaller than the cost of trading it.
Questions people ask
- Is a doji bullish or bearish?
- Neither, by itself. It shows that the period ended where it started. What came before it and what comes after it give it a direction, if it has one.
- Does a doji predict a reversal?
- No. It describes what buyers and sellers did during those candles. Studies of candlestick patterns find that, taken alone, they predict the next move only a little better than chance, if at all. It is one observation to weigh with others.
The words on this page
An explanation for study. It is not advice, a recommendation or a forecast, and a pattern or a situation described here says nothing certain about what a price will do next.