A doji forms when the open and close are almost the same — a very thin body. It means the period ended in a draw.
- Standard doji — balanced upper and lower wicks. Pure indecision.
- Dragonfly doji — a long lower wick, almost no upper wick. Price was rejected from below.
- Gravestone doji — a long upper wick. Price was rejected from above.
- Spinning top — similar to a doji, but with a small body rather than a very thin one.
Context decides
A doji in the middle of a range = normal, often ignored. A doji right at strong support/resistance after a long trend = a signal of a potential shift in strength that is worth watching.
Key points
- Doji = a pause/indecision, not an automatic reversal.
- A doji's value rises dramatically when it appears at an important level.
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