What is Doji Candlestick?
A doji is a candlestick pattern where the opening and closing prices are nearly identical, forming a cross or plus sign that signals market indecision and a potential trend reversal.
Doji Candlestick Explained
A doji indicates that buyers and sellers fought to a draw — neither side won control. After an uptrend, a doji suggests buyers are losing conviction. After a downtrend, it suggests sellers are exhausting themselves. The significance of a doji increases when it appears at a key support or resistance level or after a long trend. Context matters more than the pattern itself.
Real-World Example
A stock has rallied for five straight days. On day six, it opens at $105, trades as high as $108 and as low as $103, but closes at $105.10. This doji signals indecision. A trader long from $95 might tighten their stop or take partial profits.
Related Terms
Build Discipline Around Doji Candlestick
Understanding Doji Candlestick is one thing. Applying it consistently is where most traders fail. Ivern AI helps you build the daily habits to actually use what you know.
Start Building Discipline — Free