Doji
A candle that opens and closes at nearly the same price, showing indecision.
Also called: doji candle
In plain language
A doji has a tiny body and, usually, visible wicks on both sides. Buyers and sellers fought to a draw over that period.
Its meaning depends entirely on where it appears. A doji after an extended run suggests the move is losing conviction; one in the middle of a quiet range means very little.
It is a signal to pay attention, not an instruction to trade. Confirmation from the following candles is what makes it actionable.
Why it matters
Recognizing indecision at an extreme can be an early warning to tighten a trailing stop rather than a reason to reverse a position.
Common mistakes
- Trading every doji as a reversal signal.
- Ignoring the surrounding context and trend.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
A chart element showing the open, high, low and close for one period.
A sustained directional bias in price, built from a repeating pattern of highs and lows.
A period where price moves sideways in a narrow range without clear direction.
The number of shares, contracts or units traded during a period.
A stop loss that follows price in your favor and never moves back against you.