Doji - Candlestick Pattern

If you were to learn only one candle by name, this would have to be the one.  A "common" doji, as I call it, is shaped like a cross. A doji has no real body. What it says is that there is a stalemate between supply and demand.  It is a time when the optimist and pessimist, amateur and professional are all in agreement.  This market equilibrium argues against a strong uptrend or downtrend continuing, so a doji often marks a reversal day.

A doji in an overbought or oversold market is therefore often very significant.  The opening of the next day should be watched carefully to see if the market carries through on the reversal.  Note, a candle with a very small real body often can be interpreted as a doji.

 

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