Doji

The Doji is generally considered the most important candlestick.  The Doji often signals the beginning of a trend reversal, and is therefore very important to recognize.  There are three special types of Doji

Doji

The Doji is generally considered the most important candlestick.  The Doji often signals the beginning of a trend reversal, and is therefore very important to recognize.  There are three special types of Doji:  Dragonfly Doji,  Gravestone Doji and Long-Legged Doji


Doji Formation

The Doji candlestick forms when a stock's open and close are the same price or very close to the same price. The length of the upper and lower shadows can vary, and the resulting candlestick looks like, either, a cross, inverted cross, or plus sign. 

Type: Dragonfly Doji

 

Dragonfly Doji

The Dragonfly Doji candlestick is a special type of Doji where the open and close price are at the high of the day. 

 
Type: Gravestone Doji

Gravestone Doji

The Gravestone Doji candlestick looks like an upside down “T”; the opposite of the dragonfly Doji.  The Gravestone Doji has a long upper shadow and no lower shadow, and it forms when the open, low and close are equal.

 
Type: Long-Legged Doji

Long-Legged Doji

The Long-Legged Doji is a Doji candlestick with a long upper and lower shadows with the Open and Close price in the middle of the day's trading range.

 

Doji Interpretation

The Doji candlestick conveys a sense of indecision or tug-of-war between buyers and sellers. Prices move above and below the opening level during the session, but close at or near the opening level.

Doji Candlestick pattern

The appearance of a Doji after a long uptrend is a warning that the stock price has peaked or is close to peaking.  After a long downtrend the exact opposite is true.

The Bearish Doji Star and Bullish Doji Star incorporate the Doji candlestick within larger formations.

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