What is a Doji Candlestick?

A Doji is a candlestick in which the opening and closing prices are similar (or very close). It usually has a small or negligible real body, while the length of its upper and lower shadows can vary.

As per general market understanding, a Doji indicates that buying and selling pressure resulted in a negligible “net change” between the opening and closing prices. A Doji can appear during both rising and falling markets.

What is the “Doji Pattern” Meaning in Trading? 

Generally, a Doji indicates “indecision” or a temporary balance between buyers and sellers. However, its significance depends on where it appears on the chart.

For example, 

• A Doji after a strong price rise may prompt traders to examine whether buying momentum is weakening. 
• A Doji after a decline may lead traders to examine whether selling pressure is changing.

Note: A Doji alone does not confirm a trend reversal. Price action, volume, trend, and subsequent candles provide additional context.

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