A doji is a single candlestick that signals indecision — a tug-of-war between buyers and sellers that ended roughly where it began. On its own it's neutral; in context it can be a useful warning.
What a doji looks like
A doji has a very small body (open and close almost equal) with wicks above, below, or both. Price moved during the period but closed near where it opened — neither side won.
Common types
- Standard doji — small body, wicks both sides. Pure indecision.
- Dragonfly doji — long lower wick, little or no upper wick. Sellers pushed down but buyers reclaimed it — potentially bullish at support.
- Gravestone doji — long upper wick, little lower wick. Buyers pushed up but sellers slammed it back — potentially bearish at resistance.
How to read it
A doji says momentum has stalled. After a strong trend, that pause can precede a reversal — or just a brief rest. The signal is only meaningful in context:
- A doji at a clear resistance level after a rally is a reversal warning.
- A doji in the middle of a quiet range is noise.
Using it sensibly
- Wait for confirmation — the candle after the doji tells you which way the indecision resolved.
- Combine with levels, trend and patterns like the engulfing candle.
- Never trade a doji alone — it's a hint, not a signal.
A doji is the market pausing to think. Your job is to wait and see what it decides next.
Education only — not financial advice.