Glossary / 05

Doji

In short

A doji is a candlestick whose opening and closing prices are equal or very close, so its body is almost flat. The candle's shadows (wicks) still show how far price travelled during the period.

A doji after five falling candles A doji after five falling candlesFive filled down candles followed by a flat body with two long shadows. Doji
Illustrative chart (hypothetical)
Filled: close below open. Flat: equal open and close.

How to read it

A doji does not say which way price will go.

It shows that, within that period, price moved but ended near where it started.

Traders often read it as a pause or indecision.

It carries more meaning after a long move than in the middle of a directionless market, and traders usually wait for the next candle before drawing any conclusion.

Note: These are descriptions of chart-reading conventions. A flat body measures the relationship of open and close. It cannot establish market participants’ intentions or verify how often traders wait. A doji can also have no wick if all four prices are the same.

Common types (by the shadows)

Long-legged doji: Long shadows on both sides.

Dragonfly doji: Long lower shadow, almost no upper shadow.

Gravestone doji: Long upper shadow, almost no lower shadow.

What it is not

It is not a signal on its own.

After a doji, price can reverse or continue; both happen.

Sources

References support terminology and classification.

Related terms