Doji Candlestick Pattern Expalined

Doji means unskillfully. These kinds of candlesticks are called Doji or unskillfully because they don’t have a body. Why?

When the open price and close price are the same we will have a Doji. So Doji candlesticks have no color and so they are neither Bullish nor Bearish.

What does it mean? It means Both Bulls and Bears have the same power and are matched and the price doesn’t know where to go.

It doesn’t know if it goes up or down because Bulls are not able to increase the price and Bears are not able to decrease it. So Doji candlesticks are indecision and uncertainty signals.

There are different types of Doji candlesticks. The most important one is called Rickshaw man. In Rickshaw man the cross bar is roughly central.

Rickshaw man is a strong indecision signal. So you when you see it at the top of an uptrend, it means the price can go higher, or go down or becomes range.

Another kind of Doji is called Gravestone:

This kind of Doji also means indecision and when it is seen at the top of an uptrend it means the prices wants to bounce down.

At the bottom of the market sometimes you see the Inverted Gravestone:

Inverted Gravestone is also known as Dragonfly.

Of course it doesn’t mean that inverted gravestone or gravestone can not be seen at the top or bottom of the market. In both cases they signal indecision.

Doji can be seen in some other different shapes too:

Sometimes Doji has a small body:

When it is seen at the top of an uptrend or at the bottom of a downtrend, it means the price is uncertain to go up or down or sideways.

When you see a Doji, if you already have a position, you have to take your profit and if you don’t have any position, you have to wait for the confirmation to choose a direction and enter to a trade.  [Via]

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