RiskPicksWhat is a Doji?
A doji is a candlestick pattern where the opening and closing prices are virtually the same, creating a very thin or nonexistent body. It signals indecision: neither buyers nor sellers won the session.
Types of doji
- Standard doji: small body with equal upper and lower wicks
- Dragonfly doji: long lower wick, no upper wick (bullish reversal signal)
- Gravestone doji: long upper wick, no lower wick (bearish reversal signal)
- Long-legged doji: very long upper and lower wicks (extreme indecision)
How to trade doji
A doji alone isn't a signal: context matters. A doji after a long uptrend suggests exhaustion (potential reversal). A doji at support in a downtrend suggests the selloff may be ending. Always wait for the next candle to confirm.