Doji
Doji is one the most important candlesticks formations. This pattern implies indecision in the market place as buyers and sellers are exterting equal pressure on the markets. In addittion, this pattern shows that there has been a large trading range. But the price does not closeon an upside oe downside bias. A true doji formation has an horizontal line instead of a body, with a long wiks. There are numerous varieties of dojis, with some examples found in Pictures , but they all connote indecision on the part of the market. If the market ia a range trading the doji indicates a neutral market. If the market is a ralling, a doji is a signal that may be losing steam an the price may start to decline from here. If the market is declining, a doji is a signal that the decline may be ending and the market may start to decline from here. Therefore, a doji provides signals of potential market top or bottoms. Hower it is also important to compare the doji to recent price action. If there has been a series of near doji or small candles the doji formations is less significant. A doji formation is significat it is appears after a long green candle in an uptrend or a long red candle in a dow trend. A double doji shows that buyers and sellers are still in equilibrium, wich further indicates that a trend reversal is probably imminent.
Below example of Doji formations:A simple doji candle, which displays amuted range and a close equal to the open.
A long-legged doji candle, which shows a wide-ranging day with both bulls and bears at a standstill by the end of the period.
Doji Candlestick Pattern Quiz
Indecision Candlestick Pattern:Doji
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