A doji is a candlestick pattern where the opening and closing prices are virtually equal, creating a cross or plus sign shape. The doji represents a standoff between buyers and sellers—neither side won. When it appears after a strong trend, it signals potential exhaustion and possible reversal.
- Open and close nearly equal (cross shape)
- Signals indecision and potential trend change
- Most significant at support/resistance levels
How Doji Forms
Doji shows balanced buying and selling:
Doji Formation:
Price Action During the Period:
Open: ₹100
Rallies to: ₹105 (bulls push)
Falls to: ₹95 (bears push back)
Closes: ₹100.50 (nearly unchanged)
Result:
- Upper wick: ₹105 (high)
- Lower wick: ₹95 (low)
- Body: Tiny (₹100 to ₹100.50)
- Shape: Cross or plus sign
Psychology:
Both bulls and bears tried and failed
Indecision = potential turning point
Quick Reference: Doji Types
| Doji Type | Shape | Implication |
|---|---|---|
| Standard | + | General indecision |
| Long-legged | + with long wicks | Strong indecision, volatile |
| Dragonfly | T shape | Bullish (long lower wick) |
| Gravestone | Inverted T | Bearish (long upper wick) |
| Four-price | Dash | Rare, extreme indecision |
Example: Doji Reversal Trade
Doji After Uptrend:
| Day | Candle | Action |
|---|---|---|
| 1-4 | Strong green candles | Uptrend |
| 5 | Doji at resistance | Indecision signal |
| 6 | Bearish candle | Confirms reversal, SELL |
| 7-10 | Continued red candles | Downtrend |
Key: Doji alone wasn’t the signal—confirmation was essential.
A doji candlestick shows open and close at nearly the same price, forming a cross shape. It signals indecision—neither buyers nor sellers controlled the session. Doji at trend extremes or key levels often precede reversals.
Doji Types Explained
Standard Doji
Classic cross with small wicks. Basic indecision signal.
Long-Legged Doji
Long wicks on both sides. Extreme indecision with wild swings intraday.
Dragonfly Doji
Long lower wick, no upper wick. Price fell then recovered—bullish implications.
Gravestone Doji
Long upper wick, no lower wick. Price rallied then gave back—bearish implications.
Trading Doji Patterns
Wait for Confirmation
Never trade a doji alone. Wait for the next candle to confirm direction.
At Key Levels
Doji at support/resistance, trendlines, or moving averages is more significant.
After Extended Moves
Doji after a long trend suggests exhaustion. More meaningful than doji mid-trend.
With Volume
High volume doji shows more conviction in the indecision—bigger battle.
Doji in Pattern Combinations
Morning Star
Bearish candle → Doji → Bullish candle = Bullish reversal
Evening Star
Bullish candle → Doji → Bearish candle = Bearish reversal
Doji Star
Gap + Doji = Stronger signal of exhaustion
Common Mistakes
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Trading doji immediately – Wait for confirmation. Doji alone is just indecision.
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Ignoring context – Doji in the middle of a range is noise. Doji at extremes matters.
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Treating all doji equally – Different doji types have different implications.
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Missing the trend – Doji after uptrend differs from doji after downtrend.
How JournalPlus Tracks Doji
JournalPlus lets you tag doji patterns at entry, tracking whether your doji-based reversal trades are profitable.
