Concept
Doji Candle
A doji is a candle whose open and close are at or very near the same price, producing a very small body. The wicks may be long or short.
How to read it
- The defining feature is that the period finished approximately where it began, regardless of what happened in between.
- It is conventionally described as indecision, which is a reasonable plain-language reading: neither side finished ahead over that period.
- "At or very near" is undefined. How small a body qualifies is a judgement the observer makes, so doji identification is not standardised.
What it does not tell you
- Doji are extremely common, especially on shorter timeframes and in quiet conditions. Frequency alone makes them weak as a distinguishing signal.
- The same candle is a doji on one timeframe and an ordinary small candle on another.
- The convention that a doji marks a turning point survives largely because the examples shown are selected after the turn occurred.
Frequently asked questions
What does a doji candle mean?
That the period opened and closed at approximately the same price. It is commonly described as indecision, meaning neither buyers nor sellers finished the period ahead.
Is a doji a reversal signal?
It is frequently presented as one, but doji occur very often and most are followed by nothing notable. Examples showing reversals are typically selected after the reversal was visible.
How small must the body be to count as a doji?
There is no standard threshold. Different platforms and traders use different tolerances, which means the same candle qualifies for some observers and not others.
What is a dragonfly or gravestone doji?
Names for doji where the wick extends almost entirely in one direction — downward for dragonfly, upward for gravestone. The naming describes wick placement only.
Related
- How to Read a Candlestick — Concept
- Spinning Top, Marubozu and Harami — Concept
- Hammer and Hanging Man — Concept
Educational use only
This page is educational material about how a technical tool is calculated and read. It is not investment advice, not a recommendation to buy or sell anything, and not a signal service. No indicator predicts future prices. CernoQuant is a trading journal and analytics platform, not a SEBI-registered investment adviser. Trading decisions and their outcomes are yours alone.
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