All About Doji Pattern

DOJI

Explanation

When the body of a candle line is so small that the open and closing prices are equal, they are called Doji.

A reversal pattern in an uptrend or a downtrend.

No or very small real body.

The open and the close are the same or nearly the same.

The length of the shadows can vary .

The Doji is a powerful Candlestick formation, signifying indecision between bulls and bears. A Doji is quite often found at the bottom and top of trends and thus is considered as a sign of possible reversal of price direction, but the Doji can be viewed as a continuation pattern as well.

Doji are powerful reversal patterns in downtrends and uptrends, and are very easy to spot due to the lack of real body.

A Doji occurs when the open and close for that day are the same, or certainly very close to being the same.

It is an important alert at both the top and bottom of trends.

A Doji could be formed by prices moving lower first and then higher second, nevertheless, either way, the market closes back where the day started.

Doji is a particular signal showing indecision about the direction of the market and it represents a tug of war between buyers and sellers.

It shows that neither the bulls nor the bears were able to gain control during the day and it is possible that a turning point can develop soon.

The Doji normally signal that the market is uncertain about the continued momentum of a trend.

LONG LEGGED DOJI

Explanation

Long-legged doji is a candle with long upper and lower shadows and the real body of the Long Legged Doji is either a horizontal line or it is significantly small.

Both of the upper and lower shadows are long and they are almost equal in length.

The Long-Legged Doji has long upper and lower shadows in the middle of the day's trading range, clearly reflecting the indecision of buyers and sellers  and that the market is approaching transition period.

This pattern is formed when prices trade well above and below the day's opening price, but then close almost at the same level as the opening price.

Bullish Long Legged Doji has very long shadows on both the ends. The patterns shows indecision of buyers and sellers. It is a bullish reversal pattern. In this pattern, market is in a bearish mood and is in downtrend.

Bearish Long Legged Doji has very long shadows on both the ends. The pattern shows indecision of buyers and sellers. It is a bearish reversal pattern.

Long Legged Doji is a single candlestick pattern. Hence, a confirmation is definitely required in the form of an opposite move to the prior trade on the next trading .

 DRAGONFLY DOJI

Explanation

The Dragonfly Doji is a significant bullish reversal candlestick pattern that mainly occurs at the bottom of downtrends.

No or very small real body.

The open and close are at or very close to the top of the candle,leaving no upper shadow.

A long lower shadow.

The Dragonfly Doji is a significant bullish reversal candlestick pattern that mainly occurs at the bottom of downtrends.

The Dragonfly Doji is created when the open, high, and close are the same or about the same price.

The most important part of the Dragonfly Doji is the long lower shadow.

However, a confirmation of the trend reversal implied by this pattern by either a white candlestick, a large gap up or a higher close on the next trading day is still suggested confirmation.

 GRAVESTONE DOJI

Explanation

Market is characterized by uptrend.

No or a very small real body.

The open and close are at or very close to the bottom of the candle, no lower shadow.

Upper shadow of the doji is usually long.

The Gravestone Doji is a significant bearish reversal candlestick pattern that mainly occurs at the top of uptrends.

If the upper shadow is quite long, it means that the Gravestone Doji is much more bearish.

The market opens on the low of the day. Then prices start to rally to new high. 


The rally cannot be sustained during the day and prices plummet to the day’s lows meaning trouble for longs.

A confirmation is required on the following day to be more certain about the bearish implications of the Bearish Gravestone Doji Pattern. Confirmation may be in the form of the next day opening below the Gravestone Doji.