Doji

Main article: Candlestick pattern

The doji is a commonly found pattern in a candlestick chart of financially traded assets (stocks, bonds, futures, etc). It 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.

Types of Doji

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

See also

• Candlestick chart
• Harami cross
• Doji star