What is a Doji?

Doji refers to a trading session in which the open and close of a security’s candlestick are almost equal and are frequently used in patterns. Doji candlesticks have the appearance of a cross, an inverted cross, or a plus sign. Doji is neutral patterns that appear in a variety of essential patterns when used alone. When the open and close of an asset are almost identical for a specific time period, a Doji candlestick appears, signaling a reversal pattern for technical analysts. The Japanese word “Doji” means “blunder” or “error,” and it refers to the rarity of the open and closing prices being the same.

The doji candlestick chart pattern is a formation that occurs when a market’s open price and close price are almost exactly the same. The Doji candlestick pattern is a single candlestick pattern that looks like a cross as the opening price and the closing prices are equal or almost the same. There are different variations of the pattern, namely the common doji, gravestone doji, dragonfly doji and long-legged doji.

A doji tells traders that neither buyers or sellers are gaining i.e. its a sign of indecision. Thus it is used along with the other patterns to take any decision. Thus, before acting on any signal including the doji candlestick chart pattern, always consider other patterns and indicators as well.