What Is Doji candlestick pattern?

« Back to Glossary Index

Doji candlestick pattern

 

Doji’s candlestick patterns reflects the same sentiment as of spinning tops, the indicate the confusion, indecision in the market.

The body of the candles is very small with little or big shadows, sometime there will be no real body at all. Whenever you see doji candle appearing on chart be alert that a trend can end or it may continue.

The appearance of doji usually happens with combination of spinning tops.

The color of the candles does not matter but, green is sign of reversal in case of downtrend rally. Where as red shows the bears trying to drag a upward rally and the same rules apply that we have studied of spinning tops.

Let us see how they look on chart :

 

Doji candlestick pattern

 

In the above (30min) chart , you can see lot of doji and spinning tops appearing at various places.

As, you can see there is no clear sign, what will be the next trend, one need to see this with combination of candlestick pattern for a clear picture. The market can swing in any direction, so place your trades with half risk.

Moreover, after a continuous rally few doji candle makes a appearance, showing a pause in rally and bears trying to break the trend.

It resulted in end of a upward rally. It can happen that even after the bear trying to change the trend they might failed. Its better to look for other single candlestick pattern appearing nearby doji.

To be on the safer side during spinning top and doji check with any other signal from bullish or bearish candlestick patterns.