Web Trader MT5
A doji is a candlestick pattern formed when the opening and closing prices of an asset are nearly the same, creating a candle with a tiny or no body and wicks extending above and below. It is seen as a plus or a cross on the chart. It meant indecision; buyers and sellers battled all afternoon, and no one prevailed.
A doji is only a moment of balance in and of itself. Its relevance is nearly purely contextual. A doji after a long rally can signify that buying momentum is weakening and a reversal may be close. The similar pattern in the middle of a consolidation phase indicates nothing.
There are various variations, including the dragonfly doji, gravestone doji, and long-legged doji, with slightly different connotations depending on where the wicks appear.
Example: A stock has been going up for two weeks. Then a doji appears on the daily chart, right at the level that was previously resistance. That day, bulls and bears didn’t take control. This is a warning indication to a trader watching it, who tightens his stop and prepares for the likelihood that the trend is losing pace.
