Technical Analysis Guide

What Does Doji Mean?

The doji is a commonly found pattern in a candlestick chart and is characterized by being small in length—meaning a small trading range—with an opening and closing price that are virtually equal.

The doji represents indecision in the market. A doji is not as significant if the market is not clearly trending, as non-trending markets are inherently indicative of indecision. If the doji forms in an uptrend or downtrend, this is normally seen as significant, as it is a signal that the buyers are losing conviction when formed in an uptrend and a signal that sellers are losing conviction if seen in a downtrend.

 

Neutral : Dojis form when the opening and closing prices are virtually equal. Alone, dojis are neutral patterns.

Long-Legged: This doji reflects a great amount of indecision about the future direction of the underlying asset.

 

Gravestone: The long upper shadow suggests that the direction of the trend may be nearing a major turning point.

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